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SENATE HANSARD 17 December 2015 25-22

PARLIAMENT OF ZIMBABWE

Thursday, 17^th December, 2015

The Senate met at Half-past Two o’clock p.m.

PRAYERS

(THE HON. PRESIDENT OF THE SENATE in the Chair)

ANNOUNCEMENT BY THE HON. PRESIDENT OF THE

SENATE

CHANGE OF BUSINESS ON THE ORDER PAPER

THE HON. PRESIDENT OF THE SENATE: I know that our

Order Paper shows that we start with four Bills.  As Senate, we had cleared that today we will not observe the Standing Rules in reference to passing the set of Bills.  Unfortunately, for now, the Minister who is supposed to guide us through these Bills has two more Bills or

Ratifications that he has to put through in the National Assembly.

While we are waiting for him to come, we will go into our usual Thursday, Questions Without Notice.  As soon as he comes we revert to today’s Order Paper.

ORAL ANSWERS TO QUESTIONS WITHOUT NOTICE

HON. SEN. TIMVEOS: My question is directed to the Minister of State for Liaison on Psychomotor Activities in Education.  I would like the Hon. Minister to enlighten the Senate on what his Ministry has achieved so far this year?  I think we do not really know much and the nation needs to be updated on what has been achieved this year, since it is now end of the year. Thank you Madam President.

THE MINISTER OF STATE FOR LIAISON ON

PSYCHOMOTOR ACTIVITIES IN EDUCATION (HON. SEN.

HUNGWE): Madam President, I would like to thank the Hon. Senator for the question.  May I digress a bit and seek the approval of the Chair because I see that I have not come prepared for the question which requires a written response.  I do not know whether I could cover both since we are close to the end of the year.

Let me try and respond to the question.  It should be appreciated that the Psychomotor is a Ministry that has to do with many other Ministries in the Government because the concept which is coming through this Ministry is the concept of training people to have skills in order for them to create jobs for themselves.  There are types of skills that we are supposed to train.  There are given descriptions, sometimes they are called survival skills that we ought to give to our children.

Sometimes life skills ought to be given to our children.

We are more of a coordinating Ministry as far as other Ministries are concerned.  I now say, if these are the skills that we are to give to our children, who is going to do it?  Do we have qualified people to do that? There is what we call Inter-Ministerial Committee that involves many ministries, Higher and Tertiary Education, Science and Technology,

Primary and Secondary Education, Sport and Recreation, Agriculture,

Mechanisation and Irrigation Development, Mines and Mining

Development and so on.

For the benefit of other Hon. Senators, we are busy trying to find out how we are going to deal with this aspect.  It is a new aspect and we need to know who is best suited in terms of qualification to train our children on various skills which are required for their survival.

To address the question ‘what has been achieved’, we are busy doing what we are supposed to do, but the most important thing that we are doing at the moment is coordination.  Yesterday, some of you might have seen me on the National Broadcaster last night, we had a number of organisations both local and from outside the country, UNESCO for instance and were discussing about this issue.  We were discussing that we must make sure that it includes all other skills that we must have.  Those who want to build should be trained, those who want to till the land, fly the aeroplane and so on, should be trained.  We have so many things that we are trying to do.  On paper, we have done quite a lot and I can say to the Hon. Senator, we have achieved a lot in that regard on paper.  I can mention that we are going to work together with the

Ministry of Youth Development, Indigenisation and Empowerment, Ministry of Agriculture, Mechanisation and Irrigation Development, Higher and Tertiary Education Science and Technology Development, Primary and Secondary Education, Sport and Recreation.

Our mandate is to see to it that people do things for themselves and we are aiming at creating a working community where people use their hands, heads and their lower limbs in as far as the training is concerned so that they can survive on what we would have given them.  We have not built such schools yet. We do not have the required able person who has the necessary training skill to do the business we are doing.

However, we are not very far from that.  We are looking for example, in Domboshawa, everybody is aware that the people there are busy producing agricultural input like tomatoes but those tomatoes are distributed to Harare’s Mbare Market.  The idea that we have is to have people who can put up a plant in Domboshawa where those tomatoes can be canned.  They do not have to bring their tomatoes to Harare whilst they are fresh, we need everything to be done there.

If we have good people who can train our children to do that at Domboshawa, we want that to be done.  People are employed there but what they produce should go straight to the supermarkets and not to Mbare.  Tinoda kuti kuMbare kuitwe zvimwe zvinhu, but zvinhu ngazvitange ikoko.   We are looking at Manicaland for instance, these are other things that we are looking at to say where can we start these things.  In Manicaland vanoita zvemabanana, nezvimwe zvakadaro  and kune nzizi and we would like to identify places so that we can set up.  However, we need, first of all, people who can train.  We know that we have people who have been doing this kind of training but we are aware that they were not adequately trained to be able to sustain themselves and establish their own businesses.  This is the ultimate goal to establish their own businesses, whether it is individual business, family or community business; they should be trained in such a way that they can survive using those skills.  There is need for new skills for survival.  I am not so sure whether I have done justice to the question raised by the

Hon. Senator.  I thank you.

HON. PRESIDENT OF THE SENATE: What is important is

that you have given your best.

HON. SEN. MUMVURI: Thank you Madam President.  My

question is directed to the Deputy Minister of Media Information and Broadcasting Services.  Hon. Minister, the digitalization programme timeline was supposed to have been met or completed by mid-year of 2015.  However, we and many other nations missed the target.  What is the new target for this programme now and are we likely to meet it given that the broadcaster is characterised by poor sound output on radio and television. Thank you.

THE DEPUTY MINISTER OF MEDIA INFORMATION AND BROADCASTING SERVICES (HON. MATHUTHU): Thank

you Madam President. I want to thank the Hon. Member for a very important question, which is critical to our information dissemination.  May I assure the Hon. Member that the Ministry is seized with the migration from analogue to digital project, which is at its finalization stages as we speak.

The first units have been set up and on Monday, we will be touring the project with the Hon. Minister to check on readiness.  If you may be aware, we have been advertising that at midnight we will be switching off our televisions so that we test the equipment at our national broadcaster.  This is to ensure that by the time we migrate, everything will be functional.  I thank you.

HON. SEN. CHIMHINI: Thank you Madam President.  My

question is directed to the Minister of Transport and Infrastructural Development.  Hon. Minister, toll gates are a cash cow, is there any policy to divert funds from ZINARA to support Government budgetary lines given that Government has failed to pay bonuses for civil servants?

Thank you.

THE MINISTER OF TRANSPORT AND

INFRASTRUCTURAL DEVELOPMENT (HON. DR. GUMBO):

Thank you Madam President.  Thank you Hon. Sen. Chimhini for asking that question.  The simple answer is that we do not have that policy.  However, let me add up and say, the funds from ZINARA are only meant for roads and not for assisting Government budget in order to meet these other deficiencies that you are referring to.  So, I can safely say to you that regarding roads, ZINARA will continue to collect through the toll gates you are referring to; so that we can improve, refurbish or maybe tar some of the roads that you travel on each and every day. However, we are not allowed to release those funds to

Government coffers but only to the road department of the Ministry of Transport and Infrastructural Development to assist our local authorities and assist again to our urban councils and that is what we are doing.

Infact, if you look at it in your area where you come from - Nyanga area, when I visited, I left an instruction that one of your roads from Mutare to Nyanga be refurbished. I did not have to go to the Minister of Finance and Economic Development. That means I only went to ZINARA and gave them that instruction. So that is the way we operate. I thank you.

HON. SENATOR CHIPANGA: Thank you Madam President.

My question is directed to the Minister of Transport and Infrastructural Development. Your Deputy is on record here saying for one to qualify to drive a car with red number plates - I am talking about the Combis, one is supposed to hold a valid driver’s licence and must be 25 years old. Minister, given the carnage on our roads, is it not time that you now consider raising the age from 25 to 40 years because it has become apparent that at 25 years someone is still reckless, young and is not afraid of death? I thank you.

THE PRESIDENT OF THE SENATE: That is his own opinion.

THE MINISTER OF TRANSPORT AND

INFRASTUCTURAL DEVELOPMENT (HON. DR. GUMBO):

Thank you Hon. President. I want to thank Hon. Chipanga for asking this question. I think we are sitting here as legislators and if we want to change the law, it is within our right and perimeter to do that. So, if the Hon. Member of Parliament can initiate a law and I think members are allowed to come up with Private Member’s Bills, then that can be debated. Let me hasten to say that I do not know whether the implication is that only those at the age of 25 are capable of committing accidents and those above 40 cannot commit accidents. I do not know so we leave it for debate. If that is the wish and the intention, I have no problem with that. The law can be initiated and people can debate it and if there is good reason for changing the age from 25 to 40 or even to whatever age, we will accept the law and implement it. I thank you. –[HON.

SENATORS: Hear, hear.]-

HON. SENATOR MARAVA: Thank you Madam President. My

question is directed to the Minister of Transport and Infrastructural Development. The local media is awash with information concerning the ban on unroadworthy vehicles. Can inform the nation as to how you are going to implement the programme? Which is the category most affected on the vehicles that are going to be banned?   What is the effect that this might have or this might cause on the economy and grassroot population? I thank you.

THE HON. PRESIDENT OF THE SENATE: Order Hon.

Senator. You are posing a question on the effect that it might have on the economy and that has nothing to do with the Minister. Could you just pose a question which concerns his Ministry and that question must be a policy question.

HON. SENATOR MARAVA: Thank you Madam President. I

will rephrase the question. It is concerning the ban on the unroadworthy vehicles, it is in the newspapers today.  What I want to know is how you are going to implement that, considering that we are getting into holidays, the effect it might have on the people who are going to be travelling.

HON. DR. GUMBO: Thank you Madam President and thank you

Senator Marava. It is a very difficult question but I will attempt to answer it. I was trying to look at the policy involved but I do not seem to be clear about it. I will attempt to answer him. The effect of the statements that I am making to the people of Zimbabwe is that they will be very safe and that is critical.

Unroadworthy vehicles should be off the roads, particularly during this time of the year when we go merry making.  So, that on its own, the end result is to make sure that people’s lives are saved and cars that are unroadworthy should not be found on the roads at this time of the year. As a legislator, the Hon. Senator should applaud that policy as legislators.

As you are aware, we make such statements, particularly during this time of the year because normally there are many people who leave town, or even come from abroad to visit and our roads are very busy. Let me add up to say to you Hon. Marava that what you have read is not all, more statements are going to be made, particularly this time of the year. We have now instructed the police, Traffic Safety Council of Zimbabwe and VID, to be on the roads 24 hours until after the New Year and the reason is to make sure that people are safe. We want to go merry-making and to drive as fast as we can, even to drink as we drive but when you look at it, at the end of the day- we lose some of our members through accidents. Then the merry-making is not good enough it must be controlled Zvinonaka zvinofanira kumborambidzwa saka that is what we are going to be doing to make sure that our people are safe.

HON. SENATOR MARAVA: Minister the reason why I asked

this question is that we are not addressing the tip of the iceberg because I think that the problem is …

THE PRESIDENT OF THE SENATE: Order. You are not

standing up to give a statement, you want clarity on certain issues.

HON. SENATOR MARAVA: Is it not that the root of the problem is your permission of the importation of vehicles which would have gone beyond their lifespan and that is what we are seeing on roads.

I thank you.

HON. DR. GUMBO: Thank you Madam President. Importation

of cars does not fall in the ambit of the Ministry of Transport, but I want to believe that, whichever Ministry is responsible for that which I

believe is the Ministry of Finance and Economic Development. The end result is the same - If your car is not roadworthy we will apply the law. I thank you.

HON. SEN. MAKONE:  My question is directed to the Minister of Media, Information and Broadcasting Services. Last week I was stopped by ZBC Licence Inspectors at a roadblock. I opened both windows to show them that I had no radio in that particular car but they requested me to pull over and wanted to talk to me. I proceeded to drive away because really I was rushing for golf and I was not going to waste my time. Is there any way, Minister, you can talk to your staff to be reasonable if the vehicle has no radio in it, there is no way it can have a licence. I thank you.

THE DEPUTY MINISTER OF MEDIA, INFORMATION

AND BROADCASTING SERVICES (HON. SEN. MATHUTHU):

Thank Madam President. I want to thank the Hon. Senator for a very important question. Licencing of radios should be to persons who own radios. We will investigate on the policy on the issue that you raised. If you could kindly put it in writing so that I can bring a well researched response to your important question.

HON. SEN. BUKA: My question is directed to the Deputy Minister of Agriculture. What measures have you put in place to promote the increased production of cotton?

THE DEPUTY MINISTER OF AGRICULTURE

(LIVESTOCK) (HON. ZHANDA): I want to thank the Hon. Senator for the question regarding the policy on incentivising farmers who want to grow cotton. Let me state that Government has made a bold decision to take over COTTCO which is a major player in the cotton industry, because Government would want to facilitate and make sure that when farmers grow cotton there is somewhere to sell the cotton to.  Above that Government has made a policy to distribute cotton inputs to farmers for the next three years free of charge to encourage farmers to go back into growing of cotton.

However, that does not address the whole problem associated with cotton. Other challenges facing cotton farmers are the issue of productivity which is a yield factor – how many kilogrammes per hectare. Zimbabwe is producing about 500kgs per hectare which is well below the world standard of other countries that are producing between 2 and 3 tonnes, worse off selling in the same market. Prices of cotton are determined by supply and demand worldwide and therefore Government is making every effort to make sure that we encourage farmers to produce more cotton by making sure that they have enough inputs well in advance and there is a ready market. There is also farmer training that is involved. On the other side, emphasis is being put on the research and development side of things to make sure that we come up with the right cultivars that produces better yields.

I know Madam President there has been a talk about BT cotton, the genetically modified cotton. That does not increase production. What it does is that it reduces the cost of production by making sure that the spraying intervals are less than the conventional cotton seed varieties. We have to address the issue of productivity. That is the major challenge. Even if Government does subsidize cotton to 100% and if your yield is still below the required 1½ or 2 tonnes, we still have a challenge. Apparently, Madam President that applies across the board not only in cotton but on other commodities like maize as well that the issue of low productivity or poor yields is a major challenge that we are facing in agriculture. I thank you.

HON. SEN. T. KHUMALO: My question is directed to the Minister of Agriculture. My question relates on food security and I want to find out what we are  doing with the international promotion of the nutrition or palsies which really nobody talks about. How are you expecting us to improve in the nutrition part of it under ZIM ASSET?

THE DEPUTY MINISTER OF AGRICULTURE

(LIVESTOCK) (HON. ZHANDA): If I understood her well you are

talking about the issue of food and nutrition. I think food and nutrition is number one cluster in the ZIM ASSET economic blueprint and it occupies number one space in terms of Government’s efforts to address not only the availability of food at household level but the availability of food countrywide and also the nutrition part of it. Traditionally, I think it is incumbent upon us including all leaders and politicians that we should promote consumption of small grains. If one visits a doctor today and he is talking about nutrition – no matter which doctor or nutritionist, she or he will tell you the best food to eat is rapoko, mhunga and millet among other things. It is Government’s recognition as well that in certain parts of the country particularly in Masvingo, Midlands, Matabeleland South and Matabeleland North, Government’s effort to promote the growing of small grains is really at an advanced stage including the issuance  of  small packs of seed so that those grains can be grown in those marginal areas.

The challenge we faced as a Ministry was the issue of the availability of those small grains. However, we are packing the small grains which have been available at GMB to be distributed as quickly as possible considering again the late season that is with us and hoping obviously we can catch up with the rains that are with us.  There is also an element where Government is promoting the growing of nyemba variety so that we can deal with those situations as well. Definitely, Government does recognise the need to promote and dissuade people from those marginal areas from growing maize because of the nature of the season and promote the growing of small grains so that together with the Ministry of Health and Child Care, we disseminate information that people must consume those small grains. I thank you.

HON. SEN. T. KHUMALO: Supplementary, the issue of food

and security and nutrition, we are not addressing the nutrition side of it. We are on the food security and that is why I am asking what are you doing with the international promotion of the nutrition or palsies which really nobody talks about.

THE HON. PRESIDENT OF THE SENATE: Did you say

internationally?

HON. SEN. T. KHUMALO: Internationally and locally.

THE HON. PRESIDENT OF THE SENATE: I think let us

confine ourselves to Zimbabwe because that is where our interest is.

THE DEPUTY MINISTER OF AGRICULTURE

(LIVESTOCK) (HON. ZHANDA): Thank you Madam President.  I

think that question should be directed to the Minister of Health and Child Care.  The Ministry of Agriculture does the promotion of growing but the consumption part of it is the responsibility of the Ministry of

Health and Child Care.

HON. SEN. MOHADI: Thank you Madam President.  My

question is directed to the Minister of Transport and Infrastructural Development.  When will the dualisation of Beitbridge-MasvingoHarare road commence?  The road is now a death trap.  As you travel along it, you would find that there are a lot of accidents happening.  What we have seen being developed are toll-gates, is that part of the dualisation or what?

THE MINISTER OF TRANSPORT AND

INFRASTRUCTURAL DEVELOPMENT (HON. DR. GUMBO):

Thank you Madam President.  It is a policy question but I think since she was my deputy, I have to answer.   It is very important for the nation to know, although it is not a policy question, but I think it is in our interest to know what Government is doing about the Beitbridge-HarareChirundu road, the Beitbridge-Bulawayo-Victoria Falls road and also the Harare-Nyamapanda road.  We are seized with the matter; the funding is not easy to come by.  We are negotiating with some companies who are interested in constructing those roads.  I cannot at this particular time, divulge the extent of discussions but I want you as legislators to know that it is imperative for Government to come up with a company that can quickly get into the construction, particularly of the BeitbridgeMasvingo-Harare-Chirundu road.  South Africa, Botswana and other countries are now trying to circumvent us and come up with a road that will link South Africa, Botswana to Central Africa and beyond through Kazungula, north of Victoria Falls.

So, it is important that we come up with a plan to make sure that that we embark on the construction of the Beitbridge-Masvingo-HarareChirundu road.  We are at a very advanced stage, we should have even signed an agreement with the Chinese Government but there some issues that had to be finalised before that could be done.

So, I want to assure Hon. Sen. Mohadi that we are anxious to see us as a Ministry, Government and a people of Zimbabwe starting to dualise the road as opposed to just widening it.  It is critical that we do that because it is an important road for us.  If we do not do that economically, we are shooting ourselves in the foot.    So, I would like to thank the Hon. Senator for the question.  It was not a policy question but I think it is worthwhile that we know exactly what Government is doing about it because most of you, when you go back to your constituencies, you are going to be asked about that road.  It is definitely true that it is becoming a death trap but that is what Government is going to be doing.

*HON. SEN. CHIEF CHARUMBIRA: Thank you Madam

President.  My question is directed to the Minister of Agriculture (Livestock).  We are now in the farming season, what is Government policy regarding farming in rural areas.  We know this was the mainstay in the past, we used to get 70% grains from the rural areas, now why is it that production in rural areas has reduced yet we are being given inputs?

I thank you.

*THE DEPUTY MINISTER OF AGRICULTURE

(LIVESTOCK) (HON ZHANDA): Thank you Madam President.  I

will look for easier parts of this question and respond to the President of the Chief’s Council, Hon. Sen. Chief Charumbira.  I totally agree with him, in the past years 1995,1996 to 2000, most of our maize production which was more than 70% was grown by farmers in the rural areas.  In the 1995 to 1996, we produced 2, 6 million tonnes worth of maize which came from small scale farmers.

In these other years where we managed to get 2, 2 to 2, 3 tonnes, the bulk of the maize came from the rural farmers.  However, the major problem we are facing now is that we are having introspect, where is the problem coming from?  At that time, we had not yet entered into the Land Reform Programme, we were not yet giving inputs to these farmers but most of the grains were grown by rural farmers.  The main problem is that during those days, there was an organisation called AFC which is now Agribank and it was well financed.  I think as a Government, we need to re-capitalise AFC so that it advances loans to farmers so that they repay them.  We are aware that there are some people who defaulted on these loans during those days but we need to re-capitalise Agribank and empower it so that it may finance agricultural inputs for the rural small scale farmers.

The other reason which made farmers to work so hard is that whenever they had a harvest, they would send their produce to the GMB and within a short space of time, they would be paid so that they would have incentives.  As a result, we need to have a re-look at the financing of the GMB whereby the small scale farmers take their produce to the GMB and receive payment after some years.  I also believe that during the 90’s, the GMB did not have so many depots around the country but we had independent buyers who would take the bulk of the maize from the farmers.  Hence, the farmer would know that as long as they have grown their maize and harvested, they would receive their payment immediately.  That is why I am calling for the re-capitalisation of Agribank so that farmers would access loans which would make them grow their maize and any other crop on time, hence sell it for a fee.  I thank you.

*HON. SEN. CHIPANGA: The Deputy Minister has outlined some of the problems faced by rural farmers and these include underfunding of Agribank and Grain Marketing Board (GMB).  What then is the Ministry doing to correct these problems?   I agree that we should not blame the Land Reform Programme as the reason for the reduction in the agricultural output.   What then are you doing in the recapitalisation of Agribank and GMB to incentivize farmers?

*HON. ZHANDA:  Thank you Madam President.  Thank you

Hon. Sen. Chipanga for this question.  Like I said, I will repeat myself.  We have already had plans which are aimed at re-capitalising Agribank and we also need to know the amount of money which we can advance to Agribank.

The current market capitalisation of Agribank is about $18 million, which is below the required Reserve Bank Market capitalisation requirement.  What we are proposing is to look for a $50 million injection into Agribank to take the market cap to about $68 million and furthermore, look at how best we can also privatise the 49% to take the market cap to $120 / $130 million.  That would adequately capitalise Agribank to the extent that it can attract lines of credit to competently finance agriculture through reasonable interests and a group lending scheme which we found out to be more sustainable than individual schemes.

Also, from a GMB point of view, we want to look at the marketing system of maize; the current one whether it is sustainable or not, where we have GMB buying on the other hand and the other buyers are importing maize at the same time.  Normally, what we should be doing is that when farmers are harvesting, we should not be allowing importation of any grain.  We should be allowing people to buy from our farmers so that farmers have a ready market.

Madam President, let me say the biggest challenge that is facing agriculture as alluded to earlier on is not only confined to Agribank’s capitalisation problem.  It is the issue of the financing of agriculture, including the cost of finance, tenure and the unstructured nature of that finance model.  Obviously, the issue of access to markets is very critical.  That has been a big challenge.  Where farmers have produced, they have nowhere to sell.  We want to address that from a policy point of view and we are busy formulating a strategy to find out the role of GMB and other buyers.  Maize has been de-regulated; it is no longer controlled.  Therefore, in de-controlling it, it comes with other challenges.  For instance, if I can inform this House that if GMB is buying at $390 a tonne and on the downside we have not put a market cap, then we have created unnecessary arbitrage where other buyers can unscrupulously go and buy maize from farmers at $140 and go and sell to GMB at $390.  We are looking at that so that we can protect our farmers from being short changed.

In terms of dealing with finance as Government, we have accepted the model of contract farming as the way of addressing two fundamental issues.  Contract farming addresses the issue of inputs in advance and the issue of ready market like what is in tobacco.  We also want to make sure that we look at other crops so that we attract and give comfort to providers of private capital and we criminalise the issue of side marketing so that both parties have an amicable arrangement where they get financing, have got a ready market and they honour the agreements and also the providers of capital do not short change our farmers.  I thank you Madam President.

HON. SEN. CHIMHINI:  Thank you Madam President.  My question is directed to the Deputy Minister of Media, Information and Broadcasting Services.  As a policy, when can we expect to see other political parties and their leaders on the national television?  Thank you.

THE DEPUTY MINISTER OF MEDIA, INFORMATION AND BROADCASTING SERVICES (HON. SEN. MATHUTHU):  I

want to thank the Hon. Member for a very important question.  I want to assure the Hon. Member that anyone who wants to flight an advertisement or wants to share information with the public is allowed to do so as a policy.  They just need to raise adequate funds to pay for that advertisement.  Thank you.

HON. SEN. CHIMHINI:  Minister, we are talking of political party activities, unless the Minister is saying those that are flighted are being paid for.  We are talking of political activities of other political parties.  Are those that appear on television paid for?

HON. SEN. MATHUTHU:  Thank you Madam President.  What I am aware of is that some political parties chase away the media when they want to cover their activities.  I have no doubt that if the Reporters were allowed to cover all activities, space will be provided for those activities to be broadcast on television.  Thank you.

*HON. SEN. CHABUKA:  Thank you Madam President.  My

question is directed to the Deputy Minister of Agriculture.  When we were growing up, prison farms produced grain and there were high yields in those farms.  What methods are you taking to re-vitalise these prison farms so that prisoners may be self-sufficient in food and we may also avert riots that happen due to lack of food?

THE DEPUTY MINISTER OF AGRICULTURE

(LIVESTOCK) (HON. ZHANDA):  I would want to thank the Hon. Senator for the question but I am afraid that the question does not reside with our Ministry.  We do not prescribe as the Ministry of Agriculture what activities take place at prisons.  It is the role of the Department of

Correctional Services and each prison to undertake whatever they want without the Ministry prescribing what they should do at their prisons, unless we are invited by individual prisons like how we are invited by individual farmers to provide extension services.  That, we will obviously be too happy to render our advice to make sure that they maximize the use of the land around the prisons.  However, we have no authority to prescribe what they should do on the land that they own.  I thank you.

HON. SEN. CHIMBUDZI:  Thank you Madam President.  My

question is directed to the Deputy Minister of Agriculture.  What mechanisms have your Ministry put in place in the form of food security to feed the nation in case we do not receive adequate rainfall due to effects of climate change?  I thank you.

THE DEPUTY MINISTER OF AGRICULTURE

(LIVESTOCK) (HON. ZHANDA):  Thank you Madam President.  I would want to thank Senator Chimbudzi for the very important question because it relates to the availability of food security to the country.

What we do as a Ministry is to make an assessment of the situation and inform Government, particularly Cabinet on the predicament that we are likely to face.  I am happy to say that, we have already done that and moves are in place to make sure that the funds are made available by the Ministry of Finance and Economic Development to import the necessary food requirements.  I would like to inform this House that as of today, we have enough stocks for the next four/five months.

However, because of the weather conditions, we are not waiting for that.  The Government is well aware, especially through the Ministry of Finance and Economic Development that funds need to be mobilised for the importation of maize.  Not only as Government, we also allow private players to import maize, as long as the maize that is being imported is safe for human consumption.  I thank you Madam President.

HON. SEN. D. KHUMALO:  My question is directed to the

Minister of Transport and Infrastructural Development.  Is it

Government policy that your Ministry only deals with road network and maintenance?  I thought it would be wiser to also look at the railway network because this will ease pressure on our roads because this will even see South Africa from going the other way and will use the railway within Zimbabwe.

THE MINISTER OF TRANSPORT AND

INFRSTRUCTURAL DEVELOPMENT (HON. DR. GUMBO):

Thank you Madam President.  Thank you Senator Khumalo for your question.  Government policy is to provide both road network and a functional railway system.  For now, because of economic problems, we are not able to have very functional railway system.  We are at this moment negotiating with a partner so that we can bring back the railway network in Zimbabwe to its old status.

We are working on rehabilitating the Victoria Falls-Bulawayo-

Gweru to Mutare and again Somabula to Rutenga railway line and Rutenga Beitbridge railway line.  We are negotiating with some partners.  The moment we come to an agreement, which could not be beyond the first quarter of next year, you will see some change.  It is true that if we can have a functional railways system, that will alleviate the damage to our roads which is currently taking place because of these big trucks that are moving on our roads carrying heavy loads.  I hope I answer you satisfactorily.

+HON. SEN. MLOTSHWA: Thank you Madam President.  My

question is directed to the Minister of Transport and Infrastructural Development.  Most of the roads in Matabeleland South have deteriorated.  I do not know what the Minister is going to do especially that rains are doing more damage.

+THE MINISTER OF TRANSPORT AND

INFRASTRUCTURAL DEVELOPMENT (HON. DR. GUMBO): I

understand what the Hon. Member said.  Most roads are in a sorry state, especially those in Matabeleland South, North and Bulawayo.  I have had a meeting with them in Bulawayo.  I directed them to use the money that we have given them.  I will also make a follow up as the Minister so that during the first quarter of 2016 all the roads will be rehabilitated.

The problem is, some of them took the money from ZINARA but

they did not use the money properly.  It is true that most of the roads, especially in Matabeleland are more like rivers and the railway system is very bad.  The problem is not only in Matabeleland South but in most of our provinces.  We have now created a fund specifically to deal with rural roads and we are going to be putting more funds because generally Madam President, through you, most of our people live in the rural areas and the roads are impassable.  We are going to allocate more funds, other than ZINARA funds, we are going to allocate about US$30 million just for rehabilitating some of the roads and maybe some of the bridges because you can have a road but some bridges are impassable again.  So, we are going to be doing that in the next half of next year.  I thank you.

Questions without Notice were interrupted by THE HON.

PRESIDENT OF THE SENATE in terms of Standing Order Number

62

ORAL ANWERS TO QUESTIONS WITH NOTICE

MEASURES IN PLACE TO CONTROL FERTILIZER

PRICES

SENATOR GOTO asked the Minister of Agriculture,

Mechanisation and Irrigation Development to state the measures the Ministry has put in place to control fertiliser prices in order to protect consumers from being prejudiced by unscrupulous dealers.

     THE DEPUTY MINISTER OF AGRICULTURE,

MECHANISATION AND IRRIGATION DEVELOPMENT

(LIVESTOCK) (HON. ZHANDA): Thank you Madam President.  With your indulgence Madam President, can I orally reply to say the question was misdirected.  It should not go to the Ministry of

Agriculture, Mechanisation and Irrigation Development but to the Ministry of Industry and Commerce who are responsible for price control of all commodities in this country.  I thank you.

    THE HON. PRESIDENT OF THE SENATE: Hon. Minister,

are you then advising us that you forwarded it to that particular Ministry or did you advise Parliament or you just forwarded it to the correct Ministry yourselves?  Or you just waited to come and tell us what you are telling us now?

           HON. ZHANDA: My apology Madam President because I think

what happened in the office was that they thought it could be directed without going through Parliament.  I take advice from now on.  I thank you Madam President.

MAINSTREAMING OF VISUALLY HANDICAPPED

STUDENTS INTO TECH-VOC SUBJECTS

2.   HON. SEN. MASHAVAKURE asked the Minister of State for Liaising on Psychomotor Activities in Education what steps the Government is taking to mainstream visually handicapped students into practical, technical and vocational subjects, especially at primary and secondary levels.

THE MINISTER OF LIAISING ON PSYCHOMOTOR

ACTIVITIES IN EDUCATION (HON. HUNGWE): Madam

President, when I responded to a question from another Hon. Senator in this House, I indicated that I had not put the answer in writing for the question raised by the Hon. Senator.  However, if it is possible, I will come with the written answer.

HON. SEN. MASHAVAKURE: Thank you Madam President.  I

think I am very patient, the Minister can bring the answer any other time.

DISCOUNTS ON IMPORTED GOODS

8. HON. SEN. MASHAVAKURE asked the Minister of Finance and Economic Development;
9. Whether the Zimbabwe Revenue Authority recognise, for the purposes of working our customs duty and other import taxes and charges, discounts of more than 35% on goods bought from abroad by locally-based Zimbabweans?;
10. To further explain why Zimbabweans should not get more than 35% price discounts if the foreign source of the goods is willing to give this to a buyer;
11. To state whether it is not possible that this somehow facilitates corruption by encouraging attempted bribery by entry ports officials.

THE DEPUTY MINISTER OF MEDIA INFORMATION AND BROADCASTING SERVICES (HON. SEN. MATHUTHU) on behalf of THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA):  Thank you Madam

President.  Hon. Members, the importation of goods is governed by the Customs and Excise Act [Chapter 23:02].  The valuation of goods is in accordance with Part X of the Customs and Excise Act [Chapter 23:02], where the Commissioner reserves the right to accept declared values or in some cases reject them when the declared values do not reflect a bona-fide open market valuation.  This assessment of values is in accordance with Section 112 of the Customs and Excise Act 23:02].

Furthermore, the valuation is done in accordance with the World Trade Organisation (WTO) Valuation Agreement.  The valuation process undertaken by ZIMRA is intended to ensure that there is no undervaluation or overvaluation of goods.  However, if a client is not satisfied with the valuation established through the valuation process, he/she may appeal and seek for a value ruling through the office of the regional manager.

In valuing the goods, ZIMRA considers but is not limited to the following;

1. The open market value of similar or identical goods sold on the same market at the same commercial level to unrelated parties.
2. The value already accepted for similar or identical goods.
3. The current condition of the goods being imported.

Commercial discounts are allowed, however, they are only disallowed if the customer has a relationship with the seller in order to avoid transfer pricing.  Transfer pricing occurs when related companies can shift profits from one jurisdiction to the other in order to allocate profits from a high tax jurisdiction to a lower tax jurisdiction so as to lower or escape their obligations.

In principle, a transfer price should match either what the seller would charge an independent buyer, arms length customer or what the buyer would pay as an independent buyer, arms length customer, or what the buyer would pay as an independent.

Corruption at ports of entry at times involves a number of actors such as customs officials and the importers.  To a certain extent, I do agree with the Hon. Member that the manual valuation can somehow facilitate corruption as customs officials would use their discretion to determine the value of goods. In order to address possible bribery by customs officials at the border posts, ZIMRA introduced automated valuation of goods to avoid corruption and improve efficiency.  Under the automated valuation, the customs officer enters the details of the goods imported, for example, for motor vehicles the officer simply logs in the year of manufacture, chassis number, engine number, condition, model and fuel transmission.  The computer then generates value for duty purposes.

From the foregoing, it is apparent that not all declared values of goods are rejected and in determining the value of goods, ZIMRA uses information available in order to arrive at the true market value of the goods being imported.  Consequently, ZIMRA will, in some instances, accept declared values or reject using the methods explained above.  I submit Madam President.

MEASURES TO CURB ABUSE OF PUBLIC FUNDS

9.               HON. SEN. CHIMHINI asked the Minister of Finance and

Economic Development to inform the House;

1. What measures the Ministry is putting in place to effectively curb the abuse of scarce public funds, particularly in Government Ministries and parastatals as qualified in the Auditor-General’s reports;
2. Which Ministries and parastatals if any, have been sanctioned for such improprieties for and to state the nature of penalties applied if any, as a way of showing Government seriousness to stop the rot.

The Deputy Minister of Information Communication Technology, Postal and Courier Services (Hon. Mathuthu) having been reading the wrong written answer.

HON. SENATOR MUMVURI: On a point of order Madam

President.

THE HON. PRESIDENT OF THE SENATE: What is your

point of order?

HON. SENATOR MUMVURI: My point of order is that the

Minister is giving a response to question number 10.

THE DEPUTY MINISTER OF INFORMATION

COMMUNICATION TECHNOLOGY, POSTAL AND COURIER

SERVICES (HON. MATHUTHU): My apologies Madam President

and the Hon. Senator.  Madam President, in order to keep peace – I hope

it is correct.

THE HON. PRESIDENT OF THE SENATE: The question has

part (a) and (b).

HON. MATHUTHU: No. it is not the one.

THE HON. PRESIDENT OF THE SENATE: It reads; what

measures the Ministry is putting in place to effectively curb…

   HON. MATHUTHU: Madam President, I thank you for the

clarification.  I apologise because it is not contained in the file which the Hon. Minister gave to me.  With leave of the House, I request him to bring it at the next sitting.  I thank you.

REVENUE DERIVED FROM IMPORTED CHINESE GOODS

10.   HON. SEN.  CHIMHINI asked the Minister of Finance and Economic Development to explain why Zimbabwe on borders do not have road patrols as is the case with South Africa and Botswana.

THE DEPUTY MINISTER OF MEDIA, INFORMATION AND BROADCASTING SERVICES (HON. SEN. MATHUTHU) on behalf of THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Statistics reveal that goods valued at about 400 million were imported from the People’s Republic of China in 2014. Furthermore, for the period January to September 2015 goods valued at 320 million were imported. It should however, be noted that most goods imported from the People’s Republic of China mainly comprised of machinery electrical gadgets clothing and textiles.

Trade taxes that is customs duty, surtax and VAT collected on imports are not aggregated by country of origin. Hence it will be difficult to state the exact amount of revenue derived from goods imported from that source.

However, based on the effective tax rates about 80 million dollars was collected annually over the past three years from the People’s

Republic of China. I so submit Madam President. –[HON. SENATORS:

Hear. Hear.]-

LACK OF ROAD PATROLS ON BORDERS

11. HON. SENATOR CHIMBUDZI asked the Minister of Finance and Economic Development to explain why Zimbabwe on borders do not have road patrols as is the case with South Africa and Botswana.

THE DEPUTY MINISTER OF MEDIA, INFORMATION AND BROADCASTING SERVICES (HON. MATHUTHU) on behalf of THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Thank you Madam President, in order to keep pace with escalating transnational crimes that pose risks to revenue collection health and safety of citizens as well as the environment. The ZIMRA in collaboration with other security agencies conduct border patrols. Road patrols are also complemented by inland road blocks and these are planned exercises in order to increase the effectiveness of such patrols, hence there are permanent positions on the roads. The road blocks have yielded positive results with a number of seizures being under taken. It is however pertinent to note that the state of border perimeter roads on the Zimbabwean side are in a deplorable state thus in serious need of repair. This has posed a limitation on the frequency of road patrols. I so submit Madam

President. – [HON. SENATORS: Hear, hear.]-

REALIGNMENT OF INTEREST RATES

12. HON. SEN. B. SIBANDA asked the Minister of Finance and Economic Development whether banks have realigned the interest rates pronounced by the Governor of Reserve Bank of Zimbabwe when he issued his latest monetary policy.

THE DEPUTY MINISTER OF MEDIA, INFORMATION AND BROADCASTING SERVICES (HON. MATHUTHU) on behalf of THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Thank you Madam

President. Banking institutions have aligned their lending rates in line with the interest rate guide provided in the July 2015, Mid-Term Monetary Policy Statement.

     A few of the banks are, however, in the process of operationalising adjustments in their IT systems, particularly for existing facilities to reflect the revised lending rates.

The Monetary Authorities will continue to monitor the levels of lending rates being charged by banking institutions through their ongoing supervisory activities. – [HON. SENATORS: Hear, hear.]-

SETTING UP OF INFORMATION CENTRES

19.   HON. SEN. SHIRI: asked the Minister of Information Communication Technology, Postal and Courier Services to explain the position regarding the setting up of information centres nationwide and to state measures in place to improve the accessibility of information by persons with disabilities, especially the hearing and visually impaired.

THE DEPUTY MINISTER INFORMATION

COMMUNICATION TECHNOLOGY, POSTAL AND

COURIER SERVICES (HON. MLAMBO): Thank you very much

Madam President. Part of this question was asked during the questions without notice session - if the House might remember on 22^nd October that was a Thursday. The first part of the question is to do with the issue of information community centres which we call CICs. The second part is to do with measures in place on how people living with disabilities can access information.

     The Ministry is rolling out CICs in phases, beginning short term phase targeting the setting up of one CIC per province. This will be followed by the long term phase which will target setting a CIC in every administrative district. To date, we have eight CICs which are up and running: Murombedzi CIC which was launched by His Excellency Cde. R. G. Mugabe the President of the Republic of Zimbabwe on 12 July 2014.

Maphisa CIC in Matabeleland South is awaiting launch any time soon. Rusape and Gutu are also functional and are awaiting launch. Although these CICs have not yet been officially launched, they are already being used by the surrounding communities. The fifth CIC was set up in Epworth and is already running. This was in the news. Three other CICs that were established but   not yet functional are

Mutoko Sadza in Mashonaland East and Mubaira in Mashonaland West. The Ministry is at the moment approaching different stakeholders to partner with the Ministry in setting up these CICs.

Individual companies for example are being requested to take the lead in benefiting the communities as a way of social responsibility by ploughing back in terms of setting up the CICs. In this regard, the

Ministries has partnered with document support centre in setting up

Murombedzi CIC. The same was done for Rusape and Gutu CICs with

Huawei way and individual organizations are also encouraged to do the same on their own like what POTRAZ did at Epworth CICs which was recently launched during the by-election there. Provinces that are still to have the CICs set are Matabeleland North, Midlands, Mashonaland East and Mashonaland Central.

Coming to the second part of the question Madam President, the Ministry takes cognisance of the fact that persons living with disabilities feature in all the sectors of the economy and social and political life of the nation. Their concerns are therefore, clearly spelt out in the draft national ICT policy which has not been announced yet but will be announced in due course. Section 111 (4) 6k states, promote, support and enhance development in the use of ICTs and ensure equitable access to attendant benefits across gender, youth, people living with disabilities and the elderly. Let me also highlight that those with hearing impairment can access information just like any other persons.

Those with visual impairment the ICT sector is seeking ways to make sure that the software to assist them is readily available for use by them. Use of screen readers software application programmes that attempt to identify and interpret what is being displayed on the computer screen for example, a computer software which we call Job Access With Speech (JAWS) is a computer screen reader for Microsoft Windows that allows blind and visually impaired users to read the screen either with a text to speech output or by a refreshable Braille display. It is our belief that IT should also respond to the special needs to ensure their inclusion and participation in the economy.

Let me also assure this House that the Ministry is geared to the inclusion persons living with disabilities in the mainstream of the economy through adoption and use of the ICTs. I so submit Madam President.

ADVANCEMENT OF WOMEN IN INFORMATION

COMMUNICATION TECHNOLOGY (ICT)

20.         HON. SEN. CHIMBUDZI asked the Minister of Information,

Communication and Technology to inform the House what plans the Ministry has put in place to promote the advancement of women in the Information Communication technology (ICT) sector in Zimbabwe?

THE DEPUTY MINISTER OF INFORMATION,

COMMUNICATION AND TECHNOLOGY (HON. MLAMBO):

Thank you Hon. Senator for your question. This question was also partly addressed during the Questions Without Notice session of 22 October 2015. At policy level the Ministry has done something in addressing this pertinent issue. Section 111 (4) (k), quoted earlier addressed this issue. The policy ensures gender equality and equity in access to and the use of ICTs across all sectors of the economy.

The International Telecommunications Union (ITU) is a world body that among other duties regulates all activities that take place in the ICT and Telecommunications Sector. This body had a clause that has set aside a day to commemorate girls in ICT. The day aims to create a global environment that empowers and encourages girls and young women to consider careers in the growing field of information and communication technologies (ICTs). Zimbabwe as a signatory to ITU commemorates this day, opening opportunities and awareness for women in ICTs. We have commemorated this day in Mutare in 2013,

Chinhoyi 2014, and this year at St James High School, Nyamandlovu in Matabeleland North Province. Girls in schools are the target so that they embrace the organic relevance of ICTs whilst in schools. The realisation is that the girl child needs to be exposed to ICTs at a very early age in order for her to make IT a career I the future.

The Ministry also works with TechWomen, an organisation that works with girls in schools in the development of ICT applications. All these are efforts to promote the advancement of women in the ICT sector.

The Ministry hosts an annual event called Zimbabwe ICT Achievers Awards where we recognise business women in the ICT sector through our two awards namely, Top ICT Business Woman of the Year and Top ICT Young Woman of the Year. These awards encourage women to compete with men in the ICT sector.

Very soon you shall be hearing of efforts by the Ministry to set up Young Innovators Fund which seeks to incentivise our youngsters to come up with ingenious ICT new solutions. The fund will, among other things; if approved, finance research for development, innovation and commercialisation. We believe that we need to tease the talent in our youth and stampede them into innovative drive towards creating ICT products for sale to other countries. The import of this is that some of the richest countries in this world do not have natural resources like minerals but their economies are pivoted on the manufacturing of the products, especially ICT products. Examples are South Korea and Singapore.

ADVANTAGES OF MARKET RESEARCH

21. HON SEN. CHIMBUDZI asked the Minister of Information, Communication and Technology to explain:
22. the advantages of market research;
23. and to further explain why market research is indispensable; and
24. how market research assists in the monitoring of growth of companies as well as that of competitors

THE DEPUTY MINISTER OF INFORMATION,

COMMUNICATION AND TECHNOLOGY (HON. MLAMBO):

Thank you Hon. Senator for the question. I think this question was wrongly directed since the answers sought are not covered under the Ministry’s mandate.

MEASURES IN PLACE TO LEGALISE OPERATIONS OF

CHURCHES

26.         HON. SEN. CHIMBUDZI asked the Minister of Public

Service, Labour and Social Services to state the measures in place to ensure that all churches are registered in order to legalise their operations in the country?

THE DEPUTY MINISTER OF PUBLIC SERVICE, LABOUR AND SOCIAL SERVICES (HON. ENG. MATANGAIDZE):  I thank

you for your question which also raises a lot of questions in itself.

Our country Zimbabwe prides itself in ‘Acknowledging the Supremacy of Almighty God, in whose hands our future lies… And imploring the guidance and support of Almighty God”. [Preamble of the Constitution Amendment No. 20 of 2013].

Indeed Zimbabwe is a God-fearing nation, evidenced by the numerous churches around. The Church contributes to the identity we call the identity of a citizen. Ordinarily churches are voluntary organisations which require no registration. Although Zimbabwe is a multi-religious country, Christianity controls a major share of the spiritual market. As a result, the institution of the Church will always play a role in social, political and economic issues – whether it actively seeks to or not. And in Zimbabwe, due to historical factors that saw the Church cooperating closely with the State, it has also become a strategic actor in issues of national interest and featured prominently in efforts to resolve the crisis that engulfed the country in the past decade.

Churches are not regulated by my Ministry. When churches wish to embark in welfare/voluntary activities to benefit society and receive grants for their sustenance, only then are they required to register as PVOs.

NGOs in Zimbabwe operate under three formations, which are the

Common Law Universitas, Trust Deeds and the PVO Act. The Common Law Universitas allows organisations to operate even if they are not officially registered. Many NGOs in Zimbabwe are registered as trusts within the Ministry of Justice, Legal and Parliamentary Affairs. The Government preferred method of registration is the PVO Act, which is within my Ministry’s purview.

Having cited the above, in response to your question, my Ministry is not making plans to regulate operation of churches except under the circumstances mentioned above. The legalising of operations of churches would entail enactment of legislation clearly outlining expectations of the general public and indeed the State on the church’s operations. What I am certain about however, is that abusive religious leaders are not immune to the law. We have many men of the cloth who were/are behind bars who committed crimes in the name of God. Such conduct which is a shame and pitiful, has raised a lot of questions about operations of some churches.

So your question, Hon. Chimbudzi is so pertinent and requires us as lawmakers to urgently act upon operations of churches to protect vulnerable groups in society.

WRITTEN SUBMISSION TO QUESTION WITH NOTICE

POLICY OF DEPLOYMENT OF TEACHERS WITH SPECIALISED

SKILLS

27. HON. SEN. SINAMPANDE  asked the Minister of Public Service, Labour and Social Welfare to explain Government’s policy on the deployment of teachers with specialised skills in subjects such as mathematics to certain areas they do not speak the local languages?

THE DEPUTY MINISTER OF PUBLIC SERVICE, LABOUR AND SOCIAL SERVICES (HON. ENG. MATANGAIDZE):

According to Section 199, 200, 202 and 203 as guided by Section 194 of the Constitution of Zimbabwe, Amendment No. 20, Act 2013, the Public Service Commission is mandated, among other functions, to appoint qualified and competent persons to hold posts in the Public Service.

In order to foster transparency, fairness and accountability, as provided for in the basic values and principles governing public administration in all tiers of Government, the Public Service

Commission established committees at National, Provincial and District levels to conduct recruitment of members in the Public Service. These committees are chaired by the Public Service Commission staff and deputised by officials from the Ministry of Primary and Secondary Education. Other committee members are drawn from various line ministries who are experts in respective fields of operation.

The Head of the Ministry of Primary and Secondary Education, through the Provincial Education Directors and District Education Officers declare vacant posts and person specifications to the Public Service Commission.

Staff from the Ministry of Primary and Secondary Education, giving due regard to the technical nature of the skills required, avails experts on the recruitment of teachers at Provincial and District levels. These experts from the Ministry of Primary and Secondary Education sit in the Recruitment Committee to provide technical expertise on the suitability of teachers to be appointed. Once the Recruitment Committee concludes, a report is submitted to the Head of the Ministry of Primary and Secondary Education.

Teachers for critical subjects like Mathematics are deployed according to their specialisation. However, the Ministry of Primary and Secondary Education, in consultation with the Public Service Commission has always and will continue where possible to deploy to the various regions, teachers who are fluent in the local languages. That is policy.

However, it should be highlighted that, the Public Service Commission will - in the short to medium term, continue to face challenges in identifying qualified technical teachers with special linguistic skills who will be willing to be deployed to rural areas.  

ANNOUNCEMENTS BY THE HON. PRESIDENT OF THE

SENATE

BILLS RECEIVED FROM THE NATIONAL ASSEMBLY

THE HON. PRESIDENT OF THE SENATE: I have to inform

the House that the Senate has received the following Bills from the

National Assembly:-

1. The Finance (No. 2) Bill [H. B. 18A, 2015]
2. Appropriation (Supplementary) Bill [H. B. 16,2015]
3. Appropriation (2016) Bill [H. B. 17, 2015]
4. Banking Amendment Bill [H. B. 6A, 2015]

NON-ADVERSE REPORT RECEIVED FROM THE

PARLIAMENTARY LEGAL COMMITTEE

THE HON. PRESIDENT OF THE SENATE:  I also have to

inform the Senate that I have received a Non Adverse Report from the Parliamentary Legal Committee on all Statutory Instruments published in the Government Gazette during the month of November, 2015.

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Madam President, I want

to thank the House for its indulgence in allowing me to come this late, so I want to thank the august House for that understanding.

MOTION

LEAVE TO MOVE RATIFICATION OF THE LOAN AGREEMENT

BETWEEN THE GOVERNMENT OF ZIMBABWE AND EXPORT-

IMPORT BANK OF INDIA

         THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Thank you Madam

President. I rise to seek leave of the Senate to move:

THAT WHEREAS, Section 327(3) of the Constitution of Zimbabwe provides that an Agreement which is not an international treaty but which has been concluded or executed by the President or under the President’s authority, with one or more foreign organisations or entities and imposes fiscal obligations on Zimbabwe, does not bind

Zimbabwe until it has been approved by Parliament;

AND WHEREAS, a loan agreement between the Government of Zimbabwe and Export – Import Bank of India relating to a US$87 million dollars Line of Credit for the renovation and upgrading of

Bulawayo Thermal Power Plant being implemented by the Zimbabwe

Power Company was concluded on the 27th day of October, 2015 in

New Delhi, India; and

NOW THEREFORE, in terms of Section 327(3) of the

Constitution, this House resolves that the aforesaid Agreement be and is hereby approved.

Motion put and greed to.

MOTION

RATIFICATION OF THE LOAN AGREEMENT BETWEEN THE

GOVERNMENT OF ZIMBABWE AND EXPORT-IMPORT BANK

OF INDIA

     THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Madam President, I now move:

THAT WHEREAS, Section 327(3) of the Constitution of

Zimbabwe provides that an Agreement which is not an international treaty but which has been concluded or executed by the President or under the President’s authority, with one or more foreign organisations or entities and imposes fiscal obligations on Zimbabwe, does not bind

Zimbabwe until it has been approved by Parliament;

AND WHEREAS, a loan agreement between the Government of Zimbabwe and Export – Import Bank of India relating to a US$87 million dollars Line of Credit for the renovation and upgrading of

Bulawayo Thermal Power Plant being implemented by the Zimbabwe Power Company was concluded on the 27th day of October, 2015 in

New Delhi, India; and

NOW THEREFORE, in terms of Section 327(3) of the

Constitution, this House resolves that the aforesaid Agreement be and is hereby approved.

Motion put and agreed to.

MOTION

LEAVE TO MOVE FOR THE RATIFICATION OF THE LOAN

AGREEMENT BETWEEN THE GOVERNMENT OF ZIMBABWE

AND THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA):  Madam President, I seek

leave of the House to move:

THAT WHEREAS Section 327(3) of the Constitution of Zimbabwe provides that an Agreement which is not an international treaty but which has been concluded or executed by the President or under the President’s authority with one or more foreign organisations or entities and imposes fiscal obligations on Zimbabwe does not bind

Zimbabwe until it has been approved by Parliament;

AND WHEREAS a loan agreement between Government of Zimbabwe and the OPEC Fund for International Development relating to a US$20 million Line of Credit for the construction of 12 primary and five secondary schools in rural areas in eight provinces, provision of relevant equipment, furniture and standard teachers’ houses for the targeted schools.

NOW THEREFORE, in terms of Section 327(3) of the

Constitution, this House resolves that the aforesaid Agreement be and is hereby approved.

Motion put and agreed to.

MOTION

RATIFICATION OF THE LOAN AGREEMENT BETWEEN THE

GOVERNMENT OF ZIMBABWE AND THE OPEC FUND FOR THE

INTERNATIONAL DEVELOPMENT

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA):  Madam President, I now move:

THAT WHEREAS Section 327(3) of the Constitution of Zimbabwe provides that an Agreement which is not an international treaty but which has been concluded or executed by the President or under the President’s authority with one or more foreign organisations or entities and imposes fiscal obligations on Zimbabwe does not bind

Zimbabwe until it has been approved by Parliament;

AND WHEREAS a loan agreement between Government of Zimbabwe and the OPEC Fund for International Development relating to a US$20 million Line of Credit for the construction of 12 primary and five secondary schools in rural areas in eight provinces, provision of relevant equipment, furniture and standard teachers’ houses for the targeted schools.

NOW THEREFORE, in terms of Section 327(3) of the

Constitution, this House resolves that the aforesaid Agreement be and is hereby approved.

HON. SEN. MARAVA:  Thank you very much.  I am of the

feeling that the nation might want to know which provinces benefit and how are they allocated these schools.  This is a very good move.

HON. CHINAMASA:  Thank you very much.  That decision has

not yet been made and is going to be made by the Ministry of Primary and Secondary Education. The money is going to be applied to schools in the land that was acquired under the Land Reform Programme in all the eight provinces which are rural.  This excludes Bulawayo and Harare.  As we all know, there is a problem with respect to school infrastructure in the recently resettled areas on land which was acquired under the Land Reform Programme.

HON. SEN. MARAVA:  Whilst I understand very much what the

Minister is saying, Madam President, I think the country will be very thirsty on the allocation of these schools since they are a benefit to the nation.  As far as I am concerned, the whole country does not have equal resettlement programmes where schools are going to benefit.  The Minister should tell us before we pass this thing which areas are going to benefit.

HON. CHINAMASA:  I am sorry I was mistaken that the

information is not available.  The only information I may not have is exactly where, but province by province the information is there.  It is on paragraph 835 of my Budget.  Sorry to say this.  Mashonaland West will have three primary schools and one secondary school, making a total of four schools. Midlands will have one primary and one secondary schools.  Mashonaland Central will have two primary and one secondary schools.  Masvingo will have one primary and one secondary school.

Matabeleland North will have two primary schools.  Mashonaland East will have one primary school.  Manicaland will have one primary and one secondary school and Matabeleland will have one primary school.

I need to add that, if Hon. Senators follow through my Budget

Statement, I made it clear that in 2016, I will float a bond, an Infrastructure Bond in order to establish infrastructure at our primary and secondary schools, with a view to addressing the new imperative development of mathematics, science and technology.  We have been changing our curriculum in the primary and secondary schools to put emphasis on mathematics, sciences and technology.  Now, our ambition by raising this bond is that we put up sufficient, adequate and appropriate infrastructure to include classroom blocks, laboratories and any relevant infrastructure that will make us accord to the demands of the moment, which is that we must be a science driven society.

As Zimbabwe, we are in a leading position with respect to the development of human capital and we should not lag behind.  I know that in the past 20 or so years, because of the circumstances of sanctions, our education has taken a knock, so has been our health but we need to catch up.  I want to emphasise Madam President that this intervention is not the only intervention, we are going to do much more through the Infrastructure Bond that I have mentioned.  The Infrastructure Bond is intended to be underwritten by school development levies.  We hope that this will help us to upgrade our infrastructure at all our primary and secondary schools.  I thank you Madam President.

HON. SEN. MLOTSHWA: Thank you Madam President.

Minister, I just want to make reference to what happened some time in this Parliament.  In the 1990s, a kind of loan was approved by

Parliament and it was supposed to upgrade a road from Gwanda to Mapisa, which is 66kms but the money disappeared into thin air.  That is why we really want to know where exactly is it going, before we approve a loan. Since that time and now the 66km road of GwandaMapisa has never been development but the loan was approved by

Members of Parliament.  I think that time it was before sanctions.

Thank you.

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): I will look into that.

Sometimes, what happens is that you conclude a loan and then for some reasons, the lender decides otherwise.  You cannot take the lender to court but I will certainly look into it.  There is nowhere in Zimbabwe a loan to construct 66 kms can disappear without anything to show for it?  We are much better at managing our finances than people allege, I know.  I will look into it and I should have an answer and I would even invite you to put your question on the Order Paper so that I can give it justice.

Motion put and agreed to.

SECOND READING

FINANCE (NO. 2) BILL[H.B. 18,2015]

First Order read: Second Reading: Finance (No. 2) Bill [H.B. 18,

2015].

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Madam President, the

purpose of the Bill is to give effect to the revenue measures which I presented to Parliament on 26^th November, 2015.  The Bill therefore, seeks to provide for revenue measures which are aimed at providing relief to tax payers, enhancing revenue collections as well as improving efficiency in tax administration.

With respect to tax relief measures, Madam President, in order to provide tax relief to tax payers and release aggregate demand for goods and services, I have proposed the following measures:  Tobacco levy growers, in recognition of the potential impact of the elnino induced drought, I propose to reduce the tobacco levy payable by tobacco sellers from 1.5% to 0.75% with effect from January, 2016.

Madam President, where a registered tax payer fails to withhold or to pay to the Commissioner General any amount required to be withheld from a payee; the Income Tax Legislation provides that the registered tax payer shall be liable for payment of the amount not withheld.

However, no provision is made for the registered tax payer to recover the amount not withheld from the payee.  The proposed measure seeks to enable the withholding agent to recover from the payee the principle amount that should have been withheld.  The recovery shall not however extent to penalty and interest charges which will remain the responsibility of the withholding agent.

Madam President, with respect to exemptions from income tax, the Zimbabwe Asset Management Corporation (ZAMCO) is a special purpose vehicle set up by Government, through the Reserve Bank of Zimbabwe, to purchase non-performing loans from banks so as to clean their balance sheets. The proposal I have made seeks to exempt from tax, the receipts and accruals of ZAMCO, in order to enhance its capacity.

Madam President, during the period 1^st February 2009 to 30^th July, 2015, insurance companies and brokers erroneously applied a stamp duty rate of US$0.01, instead of the legislated US$0.05 for every dollar worth of premiums, resulting in companies incurring a huge tax liability.

The proposal I have made therefore seeks to reduce stamp duty to US$0.01 for every dollar worth of premiums on policies of insurance for the period 1^st February, 2009 to 30^th July, 2015, in order to provide relief on insurance companies as they are already facing viability challenges.

Madam President, in order to provide relief to retrenched employees who have not yet attained the prescribed retirement age, I propose to exempt from tax, a minimum value of US$10 000 or one third of the total value of the pension or annuity, up to a maximum of US$60 000.

Madam President, I also propose to exempt from tax, interest earned on deposits with a tenure of more than twelve months, this is in order to encourage long-term savings.

Madam President, in view of the constrained capacity of the insurance industry, as evidenced by failure by some players to settle obligations to policy holders, I propose to limit the VAT payable on short-term insurance to commission earned on the buying and selling of insurance policies by brokers and agents of insurance and reinsurance firms.

Madam President, the VAT Act provides for any refunds due to a tax payer to be set off against outstanding tax liabilities on other revenue heads such as income tax, customs duty and excise duty, among others.  I therefore propose to provide for the set off of any tax refunds due to a taxpayer against any outstanding tax for which the taxpayer is liable under any of the revenue laws.

Madam President, the outlook for 2016 points to a depressed international mineral prices for most commodities, albeit with marginal rebound for some minerals, with the exception of gold, thereby threatening the viability of most producers.

I therefore propose to introduce a reduced royalty rate of 3% on incremental output of gold produced by large scale gold producers in any year of assessment using the previous year’s production as a base year, with effect from 1^st January, 2016.

Madam President, I further propose to exempt from royalty, diamonds and precious stones (up to 10 000 carats) for producers who enter into an agreement with the Government to localize gemology skills, technology and marketing, in order to encourage technology transfer.

Madam President, in order to raise additional revenue to finance inescapable expenditures, and also provide for enabling administrative measures, I have proposed the following;

On transfer pricing, the current transfer pricing regulations do not provide sufficient guidance on reporting procedures for taxpayers engaged in transactions with related parties.  The new measure seeks to improve the current anti-transfer pricing provisions by giving sufficient guidance to transactions between associated enterprises.  This will go a long way in mitigating illicit financial flows from the economy.

HON. SENATOR MARAVA: On a point of order Madam

President.  Thank you Madam President, I beg to be corrected.  I do not seem to see this business that is being discussed by the Hon. Minister on the Order Paper.

THE HON. PRESIDENT OF THE SENATE: It is a preamble to

a Bill that we are going to debate.  You are a seasoned Senator Hon.

Marava.  You may continue Hon. Minister.

HON. CHINAMASA: Madam President, on excise duty on

second hand motor vehicles.  In order to further simplify revenue administration, I propose to introduce flat rates of special excise dutybased on a graduated scale by reference on the engine capacities of the motor vehicles in question.  This will remove the uncertainty surrounding the valuation of second-hand motor vehicles, as well as promoting transparency in the determination of excise duty payable.

With those remarks Madam President, I now move the motion that the Finance (No. 2) Bill, (H.B. 18A, 2015). be read for the second time.

Motion put and agreed to.

Bill read a second time

Committee Stage: With leave forthwith.

COMMITTEE STAGE

FINANCE (NO. 2) BILL (H.B. 18A, 2015)

House in Committee.

Clauses 1 to 15 put and agreed to.

Senate resumed.

Bill reported without amendments.

Third reading: With leave, forthwith.

THIRD READING

FINANCE (NO. 2) BILL [H. B. 18A, 2015]

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): I move that the Bill be

now read the third time.

Motion put and agreed to.

Bill read the third time.

SECOND READING

APPROPRIATION (SUPPLEMENTARY) BILL [H.B.16,

2015]

Second Order read: Second Reading: Appropriation

(Supplementary) Bill, [H.B.16, 2015].

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPEMNT (HON. CHINAMASA): Madam President on the

26^th November, 2015, I presented to the National Assembly 2015 Supplementary Estimates amounting to $252 335 000. These expenditures included additional expenditures incurred as well as anticipated expenditures to year end. In this regard I made an oversight by including expenditures already incurred as this contradicts Section 307 of the new Constitution. In order to comply with the above constitutional provision I seek parliamentary condonation for expenditures amounting $152 725 590 already incurred as shown in Annexure 1. These expenditures incurred between July and  mid December 2015 relate to employment costs, conduct of by-elections, grain procurement and infrastructural developmental projects among others.

To regularise this expenditure I will therefore present a financial adjustment Bill later on for your approval. I also seek parliamentary approval for a supplementary budget of $114.45 million to cover cost overruns on the wage bill, conduct of by-elections, grain procurement, crop input support and Tokwe-Mukorsi among others as shown in Annexure II.  To accommodate the additional requirement, I have revised the 2016 Budget, taking into account the additional expenditures of $114.45 million and also mindful of the need to be within the 2015 anticipated revenue collections. The additional requirement of $114.45 million would be financed through savings realised from projects and programmes which could not be implemented largely due to cash flow constraints that are being experienced across Ministries.

Notwithstanding the Supplementary Budget, the overall expenditures for 2015 will remain with the revised revenue outturn of $3.5 billion, which means there is no additional revenue raising measures that I need to take. With those remarks I now move that the Appropriation Supplementary Bill be now read for a second time.

HON. SEN. MLOTSHWA: Thank you very much. I am trying to

understand the figures here. It is unfortunate my glasses expired because I cannot see now –[Laughter] – I am so concerned about the additional amount that has already been used. I take concern especially when I look at Home Affairs and when you say you have already used this on salaries. Did I hear you correctly? On Home Affairs you have $5 028 000. We have a problem of Home Affairs but it seems you have created another Treasury in the Home Affairs Department because monies are being collected everywhere by police and we do not know whether they remit that money and whereas there are additional funds that you also allocated to them.  We really do not know what the core business of the police, according to our Constitution is. Instead of doing investigative work and maintaining law and order, they are now supposed to have Treasury at their doorstep. We want to know whether they remit all these monies that they collect all over the country.

I also wish to state that maybe it was going to be better for the whole country if you have means of collecting the fines that people are supposed to pay.  You should have a better way of collecting than to leave it in the hands of the police, because the Constitution is very much violated by these members. We will pass the Budget but we also have to put our views in terms of how the revenue collection is being done. I thank you.

HON. SEN. SIBANDA: A quick question to the Minister. The combined $252 000 000 including what you are going to ask this Senate to condone, does that in any way increase our budget deficit?

HON. SEN. T. KHUMALO: My question is on the fact that the

police who are collecting money in the streets, have two books, one for themselves and the other one is for Treasury. Why can’t they be monitored so that the funds are used appropriately?

HON. SEN. MAKONE: Minister I think I did not hear you properly when you said that after we approve the $114.45 million under [H.B. 16, 2015], the total revenue for up to 31 December 2015 will still be $3.5 billion. This does not seem to agree with the summary in your Supplementary Estimates of Expenditure, page 2 where you are now saying original Estimates of Expenditure is $3.551 billion, additional amount to be voted $114.45 million, total expenditure $3.665 billion. Surely, there should be an increase if we are going to approve this expenditure but in your very last sentence you said it will not affect the total for the year. I do not know, probably I have my sums mixed up but what is in front of me does not agree with what you have just said. I

thank you…….

THE MINISTER OF FINANCE AND ECONOMIC

DEVELIOMENT (HON. CHINAMASA):  I thank the Hon. Senators

for their contributions and my response is as follows. With respect to the contribution from Senator Mlotshwa, the core business for the police is to fight crime and this includes of course, any crime to do with traffic that is crime in terms of the criminal code and statutes. Their responsibility is to fight it and enforce the law and make sure that we have rule of law in the country.

Your concern was basically directed at what you perceive as inadequate management of the fines by the police. I want to assure you that all statutory funds and this includes any monies that are collected by the police. We keep an oversight over these funds. We also direct to what purpose they can be used.  If circumstances permit where we need money elsewhere for emergencies, as Treasury we can go into those funds and demand that some portions be remitted to Treasury.  So, we have full control of what goes on in these statutory funds.

To enhance our oversight role, in the 2016 Budget, I have directed that all statutory funds and retentions must now open up accounts with the Central Bank by end of January next year.  This is to enhance our capacity to monitor what takes place with respect to these funds.  If there is any misbehaviour or any mal-practices that are going on, we should be able to stamp them very early.  So, at the moment these statutory funds are banked all over the shore in many commercial banks.  We are now insisting by end of January that all those monies should be moved to the Central Bank so that we keep an eye on it, because the Central Bank is a banker to Government.

On the question that whether there is a better way of collecting these fines – there should be and we are exploring how we can do it electronically.  I am aware that a project is being developed on a joint venture basis.  It has not yet come to Cabinet, it is intended that as people pay fines wherever the police roadblock is, the police will have an electronic device so that as fines are paid, we will know the real time what has been paid and should be able to account for it.  Through education, we hope that if Cabinet approves this initiative, we should be able to go a long way to address the concern that you have expressed with respect to suspected corruption amongst police officers.

Hon. Senator Khumalo, you are talking as if it is valid for the  police to have two books, one for the Treasury and the other for the police.  If it is happening, it is criminal and corruption.  There should be only one book which is amenable to auditing so that we are satisfied that what has been collected in fines has been banked. So, if there are two books, it is clearly corruption. If you feel that you are able to prove it, please let us know so that we can follow the culprits.  The receipt book obviously reflects that it is a receipt book under the charge of the police force but that money is for Treasury.   We are permitting them; they do not withhold money without our permission. They retain any funds with our permission.  If there is any corruption, I cannot completely discount it; those are issues we hope we can address through the introduction of electronic devices so that we know what exactly is taking place.

If in fact the project is approved by Cabinet, it basically means that every car and its driver who passes through a roadblock will be on scrutiny.  The database will show that the driver was once convicted and fined but did not pay or he was convicted and had his or her licence suspended but has continued to drive and so on.  So, any offences relating to the car and the driver should be able to be picked up at every point that you pass through.  So, this is for the purpose of increasing revenue and for transparency as well as enforcing the rule of law.  If your licence is suspended, you should not continue illegally driving on our roads.

Hon. Sen. Sibanda asked whether this will increase the budget deficit, we have not collected much revenue and we are running a cash budget.  So, creating a deficit is not much of a problem to us because we do not have that money.  However, I want to assure you that we spent money on by-elections.  I am sure that all of us will agree that Treasury never anticipated the spate of expulsions that took place within our political parties.  We never anticipated that we would have so many byelections and there was no provision for it.  Now, when the constitutional requirement is that we should have by-elections within a given a period, we needed to abide by the constitutional requirements.  We had to take money elsewhere and put it on by-elections. It was also with respect to grain procurement and the other items that I have already mentioned.

Hon. Makone, clearly the figures are adding up, I fail to see what your problem is, like I said US$114, 45 million which is deficit.  They are adding up as far as I am concerned.

HON. SEN. MAKONE:  Thank you Madam President.  He said

that we are staying within our budget of US$3, 5 billion even after we approve the US$114 million.  This is where I am arguing, we are not staying within, we are moving to US$3, 6 million.

HON. CHINAMASA: Where did you get that from?

HON. MAKONE: If you go to page 1 of the Bill [HB, 16, 2015], that figure of US$114, 45 million, if you then go to the Supplementary Estimates of Expenditure, I think it was a mis-speaking or mistake because clearly, it is not staying at $3.5 billion. It is moving to $3.6 billion.

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA):  I can explain.

HON. SEN. MAKONE:  I have got no problem as long as there is an explanation.

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA):  The Hon. Member in fact

has a valid observation.  Basically, what has happened is that we had a budget overrun of $114.5 which we are going to pay from savings.  All those savings have not been taken care of yet.  So, there are savings and we are going to remain within our Budget.

Motion put and agreed to.

Bill read a second time.

Committee Stage:  With leave; forthwith.

COMMITTEE STAGE

APPROPRIATION (SUPPLEMENTARY) BILL, [H.B.16, 2015]  House in Committee.

Clauses 1 to 3 put and agreed to.

Schedule 3 put and agreed to.

Senate resumed.

Bill reported without amendments.

Third Reading:  With leave; forthwith.

THIRD READING

APPROPRIATION (SUPPLEMENTARY) BILL, (H.B.16, 2015)

     THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA):  I move that the Bill be

now read the third time.

Motion put and agreed to.

Bill read the third time.

SECOND READING

APPROPRIATION (2016) BILL, (H.B.17, 2015)

Third Order read:  Second Reading:  Appropriation (2016) Bill,

(H.B.17, 2015).

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA):  Madam President, the

purpose of the Appropriation (2016) Bill, (H.B. 17) is to give effect to the Main Estimates of Expenditure for the year ending 31^st December, 2016, which I tabled to this Parliament on 26^th November, 2015.

Section 3 of the Appropriation (2016) Bill charges the Consolidated

Revenue Fund with a sum of $3.398 128 billion, which relates to the

2016 Vote appropriations.  Section 5 (1) of the Bill empowers the Minister of Finance and Economic Development to transfer funds already approved by Parliament between Votes in respect of a function or responsibility transferred between Ministries and Departments during the course of the fiscal year.

Subsection 2 of Section 5 of the Bill allows discretion to the Minister of Finance and Economic Development to transfer funds from the unallocated reserve which appears on the Ministry of Finance and Economic Development Vote to any other Vote as and when the need arises in order to meet inescapable expenditures.  In addition and if necessary, the Minister can vary the amounts so transferred by taking back any surplus for reallocation to other Ministries to meet demands that may arise.

Madam President, with these remarks, I accordingly move that the Appropriation (2016) Bill [H.B. 17, 2016] be now read for a second time.

HON. SEN. MAKONE: Thank you very much Madam President.

Hon. Minister, mine is a very short question to do with the Zimbabwe Electoral Commission.  I have just looked at the Vote that you have allocated to them here, of $8.31 million.  For them to comply with the new Constitution in its entirety before the next election, it would appear to me that this Vote is very small.  Are you going to use some of the powers that you are asking for under Section 5 for transferring money between Votes for them to do their work because they will not be able to do it with $8 million?  Thank you Madam President.

HON. SEN. CHIEF NGUNGUBANE:  Thank you Madam

Chair.  First and foremost, I would like to pass my sincere appreciation

to the Minister of Finance and Economic Development for this Budget and the time he has taken to present it to the lower House and to the

Senate.  Mine Madam President refers to the Chiefs’ Council.  As you are aware Madam President, Section 305 indicates the constitutional bodies that have been created by this Constitution and the Chiefs Council is one of those bodies.  If you also read Section 325 (2), it empowers those bodies to make representation to the Parliamentary Committee before the Budget is presented.

My concern Madam President is the Vote allocation presented by the Ministry of Finance.  If you look at the Blue Book, there was an oversight.  There was mention of the traditional leadership support services and there was no mention of the Chiefs’ Council.  The Chiefs’ Council is a constitutional body which is separate from the traditional leadership support services.  However, if you look at the figures on page 378, the expenditure for the Department is $3.6 million and on this appropriation, it is the same amount that the Minister has placed.  In other words, I would assume that it is a process of cut/copy and paste.

Literally, I would want the Minister to clarify whether in actual terms the Chiefs’ Council has an allocation because the figures that are shown here and the ones in the Blue Book show that it is a vote that has been allocated to the department.

Secondly Madam President, I would want to talk about the vehicles for traditional leaders.  If you look in the Blue Book, there was an allocation and it is unfortunate to say chiefs have not received any allocation towards their vehicle loan scheme.  In 2016, we have an allocation and we would want to find out from the Minister when this allocation will be made.  Will it also take into consideration the allocation that was made in accordance to the previous year? Thank you.

THE HON. PRESIDENT OF THE SENATE: May I remind

senators that some of those section by section debates should be done in Committee Stage, not now.

Motion put and agreed to.

Bill read a second time.

Committee: With leave, forthwith.

COMMITTEE STAGE

APPROPRIATION (2016) BILL [H.B. 17, 2015]

Senate in Committee.

Clauses 1 to 3 put and agreed to.

On Clause 4:

HON. SENATOR CHIMHINI: Mr. President, on the application

of monies granted. I thought we would have asked that question to the Minister but the President had ruled that out. For example; AntiCorruption is being given US$1.6 million but we have all agreed that corruption is something that is very serious in this country. So I am asking that question under application.

THE CHAIRPERSON: It comes under Schedule, and we are

coming to it.

HON. SEN. CHIMHINI: That is okay.

Clause 4 put and agreed to.

On Clause 5:

HON. SEN. D. T. KHUMALO: While I accept that virementing

is okay, we need to know when the Minister has done it. It may be in an emergency, but as Members of Parliament, we need to know that the money has been viremented, has been given to this Ministry so that our oversight is there because if he just does it and we never follow up where the money has been sent, there is a problem.

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Hon. Senator, if we did

that, you have to come and stay in my office because that is purely an administrative function. In fact, I do not even get involved. There are accounting officers who are responsible for doing that because on a day to day basis, we realise that expenditure has arisen more than it is urgent but there is money somewhere. So, they have to move the funds. As you know, all of it is audited. There is no way that something is viremented to a purpose which is not authorised. If it is viremented to a purpose which was not authorised, we come to this House for condonation. For instance, if an emergency should arise, I am not going to start phoning everyone to say can I use this money in order to meet the emergency of mitigating a flood and so on. We will spend but under the Constitution, we are obliged to come to this House and report.

HON. SEN. D. T. KHUMALO: For me, there is no need of

informing us that he will move the monies and so forth because it can be done at any time. There is no need for us to know. Thank you.

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA) I need to respond to that

Mr. Chairman. What Section 5 is doing is giving me that power to virement, but the Constitution requires that when I do that to an unauthorised purpose, I must come to the House and explain and seek condonation if for instance, I have done it outside the period that is required.

HON. SEN. CHIMHINI: Thank you Chairperson. I am referring to 37.  Zimbabwe Anti Corruption Commission has been allocated US$1,6 million and I am saying to the Minister, if we all agree that we have a serious problem in terms of corruption, do you think this is sufficient for that Commission to carry out what you expect it to do in this country? I thank you.

HON. SEN. MLOTSHWA: Thank you Mr. President, On

Schedule No. 2 – Parliament of Zimbabwe. Minister, on this one I do not see when Parliament can get its autonomy if every time the budget of Parliament is limited like it is written here. We forgo a lot and at times subsidise the Government when coming to Parliament as Members, and it affects our contributions if Parliament administration does not have money to cater for members’ travel and other allocations that are supposed to be made.

On Schedule 8 - Agriculture Mechanisation and irrigation development US$145 091 000.  Sub-Vote for Agricultural Engineering and Mechanisation, I am sort of confused as to what I saw happening on the ground concerning the payments of the Brazil loan under

Mechanisation. I am trying to understand, are there other farming implements that Government will pay for what it has allocated to its people and will pay for, other than those that are given to groups that the groups are supposed to pay for? Thank you.

HON. SEN. MARAVA Thank you Mr. Speaker. Under Schedule

No. 2 on Parliament. Mine is a plea with the Minister. To enhance the Senators relevance Hon. Minister, will you think of them when you consider CDF so that at least the Senators have something to say and something to do to their niche?

HON. SEN. CHIEF NGUNGUBANE: Thank you Mr. Chairman.

I think I have mentioned earlier, but in a wrong platform. I would want the Minister to take note to what I addressed earlier. Furthermore, I think it is important that we differentiate the Ministry of Rural Development.,

Promotion and Preservation of National Culture and Heritage from the

Chief’s Council with regards the Vote because if you look at the constitutional provisions on page 37, it is indicated on Section 84 of the Constitution but it is referred to under the Ministry. I think it should stand alone. Thank you.

HON. SEN. TIMVEOS: Thank you so much Hon. Chair. I want

to talk on No. 14 - Health and Child Care on the Vote total. Hon. Minister, there is need to raise the allocation to the health sector from the current 7.46% of National Budget to meet the requirements of the Abuja Declaration. Hon. Minister, I want to suggest that as we were carrying on our oversight, we realised that you have a health board. I do not know if you know that the health board is renting premises for over US$200,000.00 a month and they are renting cars each for

US$57,000.00 a month and these are their own cars. Do you not think that if you dissolve that body, it can contribute and add to health care?

Thank you so much Hon. Minister.

HON. SEN. D.T. KHUMALO: Speech not recorded due to

technical fault.

HON. SEN. B. SIBANDA: I understand that Air Zimbabwe still owes the International Air Transport Association (IATA) something like US$16 million and you had promised to do something about that.  How far have you gone in addressing this issue?

HON. SEN. CHIEF CHARUMBIRA: Thank you Chair.  There

are issues that I want to enforce, Vote Number 32, Rural Development Promotion and Preservation of Culture and Heritage.  We have issues that the Minister needs to address and I think we need to sit with the

Ministry as the Chief’s Council even after this sitting.

There is a lot of confusion.  If you go to the Blue Book, which was the basis for our preparation when we came here and what it has turned out to be this afternoon, there are so many variations.  On page 37 where you talk of constitutional appropriations, there is US$8 million, which is allocated to the Ministry of Rural Development and Preservation of

Culture and Heritage.  We think it is a misplacement, the US$8 million,

I do not think it is going to the Ministry; it is supposed to be for the

Chief’s Council because we are trying to comply with the Constitution.

However, according to the documents you brought today, the US$8 million has disappeared, it is not anywhere in the document.  You also have in the Blue Book, the car loan vehicle scheme for the chiefs; it is allocated US$2.5 million.  In the documents you brought in today that is not reflected anywhere.  Just to remind you that in the year 2015, you had allocated US$3.5 million for the vehicle loan scheme and you did not release a cent for 2015.  For 2016, you have allocated a lower figure.  I do not see the logic why you think the vehicles will be cheaper next year than they were in 2015.

Whilst we were allocated US$3.5 million for 2015, nothing was ever released.  I think that is one item in the whole budget where not a cent was released.  Does that reflect the attitude of the Treasury towards the institution of Traditional leadership or there were other problems.  To enforce the fact that as we stand, the department of traditional leaders support services in the Ministry of Rural Development and Preservation of Culture and Heritage, has no allocation because you have now said there is an amount of US$3.6 million that goes to Chief’s Council.  That amount is not even enough for the allowances and vehicles for the chiefs, it is insufficient.

To imagine that you also have the department itself, I think we need to sit down in the spirit of Section 325 of the Constitution, which says the Chief’s Council should make direct representations on issues of the budget.  Thank you very much.

HON. SEN. MARAVA: Thank you Mr. President, I am on Home Affairs, Vote 18.  Mr. Chair, the Blue Book defines traffic fines.  There are three areas that have been shown as examples and two of them rose by 100% on page 25.  The third one Hon. Minister has risen from US$20 to US$100 which amounts to 400% increase of a fine for a person driving with no drivers’ licence.  I feel that this is far too much for a person travelling on the streets right now.  US$100 is a lot of money, the increase is too high and will create corruption.

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Thank you Mr. Chairman.

I must say that whether we are in the Lower House or this Upper House, the common thread is that funds are inadequate for all line ministries.  I think we know why.

On the question raised by Sen. Chimhini, resources are not available, all our policy thrust is to create an environment in which the economy can grow and if the economy grows, we will be able to have sufficient money for our basic needs.  You are quite right that the allocation to the Zimbabwe Anti Corruption Commission is not adequate.  However, as you know, the structure of our budget leaves a lot to be desired and I have said this on many occasions.

The fact that in every US$100.00 I collect through ZIMRA, US$92.00 goes to wages and recurrent expenditure and none goes to operations and capital formation, is something that is not desirable.  It is not sustainable and it means that as a population, we are not setting aside any money for tomorrow; we just live for the day.  That is the mindset, culture and the habit that we must run away from.  The criticism is valid but I want you to understand that to get us out of our current habit is a process and not an event.  We have to tackle this issue in two ways.

First, to rationalise expenditure as of now and this is an exercise that Hon. Minister Mupfumira and I embarked upon to tackle, with respect to the civil service.

We made some recommendations to Cabinet, which were accepted and some of the recommendations have already begun to be implemented.  I will give you an example of how unsustainable some of our practices are; those who receive pensions, they receive it from this budget, we do not have a stand-alone fund for pension, in the same way that you know there is Old Mutual Pension Fund and First Mutual Pension Fund.

However, the worst thing is that there is no contribution from anyone.  There were some contributions from the past, on those who retired before 2009.  After 2009, there has not been any contribution and yet we are called upon to pay the pensions as and when they are due.  Those are some of the issues that we are seeking to correct so that we put ourselves back on sustainable basis in terms of how we manage our economy.  It is not an adequate answer, but I just want you to understand that those are some of the things.  Right across, and I will not defend it, the Votes are not adequate. I am not proud to present a $4 billion dollar

Budget quite frankly – [HON. SENATORS: Hear, hear.]- which is why my thrust since I became Minister of Finance and Economic Development has not been to worry about figures because there is nothing to talk about figures. My major thrust has been to develop a policy framework to grow this economy and this economy has a lot of potential if we do the right things, we should have no problems running an $8 or $15 or so billion Budget. That is the direction we must go –

[HON. SENATORS: Hear, hear.]-

Hon. Mlotshwa, I think I have already given you some answer.

But, with respect to why the funding to Parliament is not as it should be. All the Budgets are basically trying to pay for salaries and very little for operations. So, when you look at everywhere even the Executive – just to pay salaries and pensions, and even those we are running into arrears with respect to payment of pensions. Right now I have not paid for the

November pensions. We are going to pay them on the 21^st of December. So I want us to understand not to frighten you, not to throw your hands in the air as a situation which is hopeless and helpless. I do not believe so. We should all agree and I am happy we the consensus that we have been able to build in both Houses as to the strategies to overcome and get round our challenges. I know it can be done and I am very satisfied now with the direction and let us maintain the course and we should be able to realise our full potential.

With respect to your query on the Brazilian facility, the Brazilian facility is targeted at small scale farmers. It is what they call more food for Africa programme. They are doing this not only just to Zimbabwe but to other countries as well. It is targeting small farmers. This is modeled on their own scheme. Brazil used to be a very poor, food deficit country and of course it has a very large population. When they adopted this kind of model to support the small farmers in order to make agriculture a business, not just an ordinary occupation – they fund that they were now talking about surpluses in food production. So, were it applies to us is that it is a $98 million loan. They have already delivered equipment worth $38 million. This equipment has been delivered to something like 21/22 small scale irrigation schemes throughout the country. The property and the tractors remain Government property and it is on a cost recovery basis. Measures have been put in place to ensure that there is that cost recovery in order to pay the loan. If we do not build that track record we will not get the next tranche. If we do, that will become a revolving fund almost into eternity.  I am satisfied and Treasury is satisfied with the measures that has been put in place at each irrigation scheme.

Where the people have not yet been trained, the tractors are still intact. They only be used when we are satisfied that measures necessary to run this scheme on a cost recovery basis have been put in place.  We have identified irrigation schemes because there is water. We are going to rehabilitate the schemes because there is water, because we suffer from periodic droughts, I think our emphasis is now on irrigation.

We are also going to run what you would call command agriculture. Those farmers who are in these schemes will not grow what they like – [HON. SENATORS: Hear, hear.]- They have to grow crops which we dictate to them so that we are able to provide markets for them. The biggest challenge for any farmer is market. So in this regard, we are guaranteeing the market and we are obviously going to dictate that they grow maize. We are also going to dictate that they grow crops which have value. At each irrigation scheme, when a service is required it will be paid for and the money deposited into an Agri Bank account.   Any payment for service is structured in such a way that a portion is going towards cost recovery a portion towards maintenance of the equipment and another portion towards administration of the scheme at that scheme. So I am satisfied that we have an opportunity to mechanize nationally.

We have other schemes that we are negotiating with other countries India and Belarus to target A2 farmers and A1 farmers. A1 can also be covered   under the Brazilian scheme, but the A2 farmers are not.  We hope that the equipment we are negotiating with Belarus can be targeted toward equipping the A2 farmers.  So, the challenge we have is that we must never suffer from food deficits.  We need to get out of that situation and I believe we can. This country has more than 10 000 dams and very few of those have been linked through irrigations schemes   to the field edge of the farmer. So the resources we are going to devote get is to desilt some of those dams whish have silted without being used at all, so they need desilting and also basically  to develop irrigation infrastructure and we hope that this will be done.

Already, we have signed a $60 million loan with the International Fund for Agricultural Development (IFAD) to develop small scale irrigation schemes and to establish new ones. We have also been given a loan by Abudhabi and Kuwait Fund to develop irrigation scheme around Zhowe dam which is in Matabeleland South which will open up 2 300 hectare of land which will benefit about 1 500 households.  Now all this is essentially to make sure that agriculture takes its rightful place as the cornerstone of our economy. I keep an eye to make sure that your concerns will never happen or will never be fulfilled on corruption and so on, that I am very sure we can keep a check on.

Senator Marava, I think I have already answered the bit about Parliament. On CDF, I must say as now, we are confining to those who have constituencies.  We do not want you to create conflict within the constituency. Members of the National Assembly should not think that you want to usurp their function as the elected representative of those constituencies. Some of these things we can discuss later, resources permitting to see what we can do with respect to Senators but as of now,  the Constituency Development Fund is for Members of the National Assembly. Hon. Sen. Sibanda, with respect to Air Zimbabwe obligation to IATA, we have to look into this. Primarily, it should have its own capacity. If an airline cannot even service that basic requirement to pay its obligation to IATA, there are some problems. Yes, we are aware of the problems of viability which is why Cabinet took a decision to authorise the Ministry of Transport and Infrastructural Development to look for a strategic partner and I believe that they are doing so. We should never have a situation where a $1 million obligation, Air

Zimbabwe is unable to pay and it is flying. That is clearly unacceptable. If we come in as we have done in the past, it can only be a temporary measure just to keep Air Zimbabwe flying while in the mean time they are looking for an investor to engage.

Hon. Sen. Charumbira, I thank you very much. I take the point and I think that we are going to need some meetings so that we clarify the position. I think you drew my attention to the fact that the Traditional

Leaders’ Support Services is something different from the Chiefs

Council. That surely will be rectified and we will separate what is Chiefs Council and it must reflect your allowances and any cost of administering the institution of chieftainship. That will be looked into and I am sure that the officials are listening to my comments.

I know the word that Hon. Sen. Chief Charumbira is always used to say, ‘Finance is not releasing money, is under funding and so on’. When it happens that we are not releasing, it is because there is nothing in the pipeline to release. I crave your understanding. The notion that I have a pocket somewhere, where I can just “nokora” money and pay, it is not so because we have a multi currency regime. Because we have a multi currency regime, we do not have monetary policy worth talking about. Because we have no monetary policy, we are not printing money. Our stock of US dollar in the country is derived from what we get from taxes and if the economy is not performing well, it adversely affects collection of revenue. Another source of our US dollar is coming from the Diaspora remittance, exports and loans. A lot of those loans are basically going towards capital development like power plants and so on.

I want you to always understand before you use the word “release” to ask yourself, does the Minister actually have the funds which he is refusing to release. Any failure to deploy any resources is not out of any malice or that we do not regard the institution highly. We do but it is just because that there are other problems which you know, which is why we are working frantically to make sure that our economy recovers.

There are already measures that we have taken which are starting to bear fruit. I always mention the gold sector. In 2014 Budget which was my first Budget as substantive Minister, we introduced fiscal measures to encourage increased gold production. I am happy to say that production in 2014 has jumped from something like 13 tonnes to 19 tonnes this year and next year we are targeting 24 tonnes. I can also give some examples of other sectors responding to fiscal measures that we took and I believe that we are laying a very sound foundation for the economic management of our economy.

Hon. Sen. Marava, the increase from $20 to $100, I agree with you. I have already said in the Lower House that I am going to reflect on it. It is too much. The only problem which I got to understand later is that we have to slot it within the levels of fines which are in the statutes from level 1 to 14. I understand that $20 fine is in level 3, the next level is level 4 which is $100. We wanted to make a statement to say this attitude and culture of just driving through red robots without regard to the safety of yourself and others is clearly not acceptable. We wanted to drive the point that this is no small matter. It is no small crime but I agree that I think incrementally from $20 to $100 is too much and the Attorney General is going to be seized with that matter and see how we can reflect it.

I notice that I should have replied to Hon. Sen. Chief

Ngungumbane. I think I have answered half of your questions with respect to the Council of Chiefs. That will be rectified. With respect to vehicles, I have already undertaken to the Council of Chiefs that we must have a meeting. Unfortunately, I got very busy and I was away. When I was looking for Hon. Sen. Chief Charumbira, he was not in the country and when he came to look for me I was not in the country. So the problem went unresolved but it is a matter that I am committing to resolving. I believe that some of the documents that I need are already at the Ministry. I need time to go through them. The point is that quite frankly, I do not have the money. I have had to be very creative in terms of trying to meet our needs. If it takes time, creativity does not come easy. I need more time to reflect on issues and what I need to do.

Senator Timveos, thank you very much for drawing my attention to the Health Board but I do not know whether it is completely unnecessary. You are asking for its disbandment. The same call was made in the National Assembly and I promised that I will refer your comments and comments which were made in the Lower House to the relevant Minister of Public Service, Labour and Social Services. She is responsible for the structure of the public sector. I will refer the matter to her. You are right also and I actually honoured up to say that my allocation to the Health and Child Care Ministry did not meet the Abuja requirements.  My attention has also been drawn to the fact that there are some development partners who are outside Government supporting some of the health services but because it is outside my Ministry, it cannot be reflected.  So, when maybe I take into account what is being spent overally on health, we may well be meeting the Abuja declaration target.  I have been engaging the development partners urging them to direct those resources direct to Government so that we avoid duplication and also that Government is made aware of the resources that are coming from development partners.  I hope that as we continue this dialogue, some of them will want to direct those resources to Government.

Senator Makone, you raised the issue about underfunding of ZEC, that is true but also it is an issue that I am very alive to that ZEC has a mandate to come up with polling station specific Voter Rolls in time for the 2018 elections.  We gave them some money to start the pilot project with respect to the new by-election that were conducted.  I think the last one I know where this pilot project was introduced is the Marondera Central by-elections. So, we will make sure we find ways to make sure that ZEC fulfills its mandate.  Mr. Chair, I thank you very much for the opportunity.

HON. SEN. D.T. KHUMALO: The nutrition part in the ZIM ASSET is not being covered because the system of eating is not being followed or people are not being told to grow the right things.  We are saying grow starch; that is maize, small grains, et cetera. We are saying can the funds be available for growing the pulses, not only the small grains which is beans.  We need pulses to be part of our diet.

HON. CHINAMASA: On the contrary Hon. Senator, we are promoting the growing of pulses.  As you know we are promoting a balance diet that you need not just starch but protein also.  We are promoting a lot of chicken projects, goat rearing, a lot of pulses where they can be grown.   The practice generally is to regard pulses as a late plantation in the season.  What starts first is the grain. Somewhere around January; if the rains come then grow pulses they will be able to reach maturity.  Even in the small irrigation schemes, one of the crops that we are going to dictate to the irrigation schemes to which we have the distributed the Brazilian equipment is pulses both for two reasons.  It provides the nutrition that you are talking about but the second reason is that it has more value. If you grow beans, it is a better value than growing maize.

So, the farmers who are benefiting can be better able to pay for the services that they are going to get.  In this regard, I am very clear and which is why I also said it is not enough to ask people to grow; we also must provide market access.  One of the challenges that most farmers are facing is market access.  If we can grow in sufficient quantities and volumes to export, it is better that way. Like the equipment from India,  India is one of the largest consumer of pulses. In fact, they have got 500 or so varieties of pulses yet here we just know about sugar beans.

So, we are saying to the Indians, let us have the equipment so that we can grow for the export market to India.  They are quite happy to talk to us along those lines.  Thank you very much for raising that issue.

House resumed.

Bill reported without amendments.

Third Reading:  With leave; forthwith.

THIRD READING

APPROPRIATION (2016) BILL, [H.B.17, 2015]

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA):  I move that the Bill be

read the third time.

Motion put and agreed to.

Bill read the third time.

SECOND READING 

BANKING AMENDMENT BILL, [H.B.6A, 2015]

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA):  Madam President, I rise to

present the Banking Amendment Bill for consideration by this august House.  I am pleased to advice that this Bill went through a rigorous process before being presented to this august House.  The Bill has been amended to reflect the comments of various stakeholders who submitted their comments to Parliament during the Committee Stage of the National Assembly.  I am therefore confident that the Bill being presented to the Senate today has received the support of all stakeholders and that it meets the standards required for effective regulation of the banking sector.

Madam President, the principal objective of this Bill is to enhance the integrity of the banking system by addressing vulnerabilities which threaten the stability of the banking sector.  To this end, the Banking Act which is the foundation of the regulatory framework for the banking sector will be strengthened to address weaknesses that have been identified when benchmarking with Basel Core Principles for effective banking supervision and regional best practices.

Focus of the amendments Madam President, is on the following

areas:

• Good Corporate Governance;
• Credit risk management;
• Consumer protection and
• Troubled bank resolution framework.

I will now address this in turn.  Madam President, poor Corporate Governance has been identified as a major cause of bank failures in Zimbabwe.  This is due to the fact that the quality and implementation of decisions affect the performance of institutions.  The role of banking institutions as financial intermediaries and the prudential considerations for these institutions require Corporate

Governance standards for financial institutions to be rigorous. The

Corporate Governance standards are based on recommendations set

by the Basel Committee based in Switzerland on banking supervision, which sets its standards for the regulation of banking institutions.

Madam President, the objective for promoting good Corporate Governance in the banking sector are also based on the principles for enhancing Corporate Governance of 2010 also set by the Basel  Committee, which are as follows:

1. To protect depositors’ funds;
2. To reduce the incidence of bank failures;
3. To enhance public confidence in the banking system;
4. To enable the public to analyse the performance of banking institutions to make informed investment decisions.

Madam President, the Bill requires banking institutions to comply with all good corporate governance requirements of the regulator before commencing operations on an ongoing basis.  This will prevent banking institutions from operating if they have not instituted the requisite corporate governance systems.  The Bill enumerates the fiduciary responsibilities of the Board of Directors and senior management of banking institutions to enable the officers to understand their fiduciary responsibilities.  The intention is to inform directors about their responsibilities and the consequences of their failure to fulfill those responsibilities.

Madam President, to reduce conflict of interest arising from multiple and interlocking board memberships, the Bill will restrict the number of board memberships for directors of banking institutions.  Non-executive directors of banking institutions will not sit on boards of more than five registered companies, including the board of the banking institution on which the director sits.  A director with executive functions in other companies should not sit on the boards of four registered companies, including the banking institution on which the director sits.  The majority of board members will be non-executive, independent board members so as to enhance independent decision making.  This is in line with the above mentioned Basel Committee

Principles on good corporate governance, that recommends that boards of banking institutions should be dominated by non-executive board members.  The principle also mentions the danger of shareholder representatives who exert in appropriate pressure on the board and undermines the independence of the board.  The board should have the capacity to make independent decisions that serve the best interests of the banking institutions and the depositors.

Madam President, the Bill will penalise shadow directors, like shareholders who direct board decisions behind the scenes when they are not part of the board.  The shadow directors compromise the independence and objectivity of board decisions.  The Bill also gives the regulator oversight over controlling companies of banking institutions.  Directors and officers of controlling companies and of banking institutions will therefore need to be approved by the Registrar.

Madam President, shareholding limits for individuals in banking institutions will be reduced from 25% to 10% of share capital.  This is aimed at reducing the risk of bank failure arising from undue influence by individuals through a diversified shareholding structure.

Shareholding limits for non-financial corporate entities shall be raised from 10% to 25% of share capital.  Regulated financial entities will continue to establish wholly-owned banking institutions with the approval of the Registrar. The level of significant shareholding to be approved by the Registrar will be five percent of share capital.  Madam President, the Bill will provide for independent Risk and Audit Committees.  This is in line again with the Basel Committee Principles that banking institutions should have Risk Management and Audit Committees that possess sufficient authority, stature, independence and resources.  The Bill also provides for the mandatory appointment of a Compliance Officer as a principal officer of a banking institution to enhance the compliance function.

Madam President, in line with the regional Southern African Development Community (SADC) recommendations for the enhancement of cooperation among financial sector regulators, a Financial Stability Committee will be formed to coordinate their activities to minimize regulatory arbitrage by financial conglomerates.

The Financial Stability Committee will perform the following functions:

1. Facilitate early identification of sources of risk (to stability) and of potential vulnerabilities that could threaten financial stability;
2. Promote rigorous, accurate and systematic assessment of the present degree of financial stability as well as the outlook ahead;
3. Evaluate the ability of the financial system to absorb shocks, should risks identified materialize;
4. Recommend appropriate policy responses for identified risks;
5. Promote adoption of preventive and timely remedial policies which foster financial system stability; 6. Prepare financial stability reports; and
6. Harmonise legislative frameworks.

Madam President, credit risk is a major threat to the stability of the banking system in Zimbabwe.  The Bill will strengthen the regulation of insider loans whose proliferation has been a major cause of bank failures in Zimbabwe.

The Bill also provides for the credit rating of all banking institutions operating in Zimbabwe.  Credit ratings by an accredited rating agency will be done at least once a year and the ratings will be published.  Credit ratings promote transparency in the banking system and improve the performance of financial institutions through market discipline.

Madam President, the Bill empowers the Reserve Bank to regulate the Credit Reference Bureau.  The Reserve Bank will establish a Credit Reference System Unit to promote efficient, timely and accurate credit information sharing, thereby enhancing credit risk management, governance system and fostering credit discipline in the market.

Banking institutions need to access dependable information on the borrowing history and repayment patterns of borrowers to create profiles of borrowers.

Fragmentation and lack of standardization in the provision of credit information has prevented banking institutions from realizing the full potential from existing information registries.  In the long to medium term, the use of accredited Credit Reference Bureau will stabilise the banking system by improving the risk management capabilities of banking institutions.

The Bill proposes the establishment of the Zimbabwe Asset Management Company (ZAMCO) to acquire eligible and collaterilised non-performing loans in the banking sector to cleanse banks balance sheets of toxic assets, which have hampered the institutions’ underwriting capacity.

The acquisition of non-performing loans will help strengthen the bank’s balance sheets and provide them with the liquidity to make them attractive to access cheaper sources of funding.  This is expected to reduce the cost of funding concomitantly translating into reduced lending rates.

Madam President, hon. members are aware that the public has complained about poor service delivery by banking institutions.  There is need for a transparent dispute resolution system to facilitate consumer protection and to encourage amicable dispute resolution between banking institutions and their customers.

Banking institutions will be required to make available in writing to their customers, procedures for dealing with the complaints made by customers and to designate an employee to be the Customer Services official at all branches.

Madam President, an important factor in minimizing bank failures is the ability of the regular to act at an early stage to address unsafe and unsound practices or activities that could pose risks to banks or to the banking system.  The supervisor should have adequate supervisory tools to bring timely corrective actions.

In line with the above, the Bill enhances the bank resolution framework by empowering the RBZ to restructure and merge troubled banks in line with international best practices.

Madam President, some of the proposed amendments relate to matters that address shortcomings in the legislation.  The Bill intends to extend immunity to persons acting under the authority of the Registrar for actions in good faith.  Currently, immunity from prosecution is provided only to officials of the Reserve Bank.  Curators, liquidators, auditors and others appointed to work for the RBZ will also have immunity from prosecution in the performance of their duties and when discharging their responsibilities in good faith.

The Bill will also address matters of duplication and overlap of functions between the RBZ and the Deposit Protection Corporation (DPC) regarding supervision of banking institutions.

Madam President, in my concluding remarks, let me highlight that this Bill recognizes that the Banking Act is lagging behind market developments and regional regulatory standards.  Most of the Bill’s provisions reflect best practices in banking legislation.  The Bill will strengthen the Banking Act by ensuring that the Act contains the minimum regulatory standards that are necessary for effective regulation of the banking sector.

Madam President, with these remarks, I now move that the Banking Amendment Bill be now read the second time.

HON. SENATOR MLOTSHWA: Thank you Madam President. I

just want some clarity from the Minister, otherwise I think the Banking Amendment Bill is good for country. The Deposit Protection

Corporation, how protected are we the depositors after passing of this Bill against the liquidation of - suppose the institution is de-registered by the Registrar General and also, if there is a change of currency? Also, the conformity to the indigenisation laws by the banks, what does the Bill bring that is new to the operations?

HON. SENATOR MASHAVAKURE: Unfortunately, I did not

have the chance to go through this but I think the Minister can still help me out because I did not hear him talk about these mobile money services that we have. Are they also covered by this; the Ecocash, Telecash and One Wallet? Does the Banking Act of Zimbabwe principles also address issues of mobile banking?

HON. SENATOR CHIMHINI: While I appreciate the protection

on the staff or board members of RBZ, what guarantees do we have that there is no abuse because they can be protected while they can also abuse the system as individuals. Is there a mechanism where the Minister can ensure that they will not go out of tune because they can be protected?

HON. SENATOR B. SIBANDA: Hon. Minister, capitalisation of the ZIM ASSET Management Company (ZAMCO), where is it going to come from?

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): I must crave the

indulgence of the House to ask the name of the Hon. Senator who spoke about mobile phones so that I can acknowledge him – [HON.

SENATORS: Mashavakure.] – Thank you.

Thank you very much to the Hon. Senators who have made contributions on this Bill. Hon. Mlotshwa you asked the question to what extent are depositors protected. You are, but not adequately as of now. We established the Deposit Protection Corporation, not long ago and the idea is that we build up a fund from which we can meet the full depositors’ funds when a bank goes under. Currently, they are at a stage where they can only meet up to $500, I may be mistaken about the exact amount.

As you know, it is like a company in liquidation. When a company goes into liquidation, you end up almost getting, with respect to your claim, one cent in the dollar of your claim. So, we are in the process of building up that fund and all the commercial banks, once you are a commercial bank you subscribe to this fund which is managed by the Deposit Protection Fund. At least since we established it, there is that partial relief, not full or adequate but at least, especially with small depositors, it can mean quite a lot.

Hon. Senator Mashavakure, you raise a very pertinent question on mobile banking. It is something that has grown like wild fire in Zimbabwe and we had a seminar on Monday where a survey was done and they were now comparing us with Kenya. Kenya started mobile banking way before we started but I am told that we have now overtaken them and that in fact, mobile banking has become almost the bank of first resort for a lot of our people, especially the previously unbanked.

My message to the commercial banks has been to say they must adopt new strategies to a changing environment. The fact that our economy is now unformalised, requests that they have lending practices which are responsive to the needs of the market. I hope that those banks which follow the advice, I am sure over the years they will be able to sustain their operation.

Coming to your question, where does it fit in. This is going to be dealt with in regulations. So, everything will be in detail in the regulations. More so, I think it has to be through regulations because

ICT is a fast changing area and you do not want to fix it and have the rigidity of putting it into an Act of Parliament. It is better handled flexibly in regulations.

Senator Chimhini I am sorry, I missed your point. You spoke quite fast for me to take down the notes.

HON. SENATOR CHIMHINI: Thank you. Minister, you talked about protection of either board members or staff of the Reserve Bank of Zimbabwe, that they would be protected in terms of prosecution as compared to other board members elsewhere. I am saying what mechanism do you have so that there is no abuse of that protection?

HON. CHINAMASA:  Let me put the record straight that officials of the Reserve Bank of Zimbabwe are already protected under the Reserve Bank Act for any activities or any functions they perform in good faith. So, the critical word there is good faith and the lawyers will know the distinction between good faith and bad faith. So, you are not protected for what you do under bad faith, only good faith. Of course, the check against abuse is always the courts. You can be taken to court even where you argue that you have acted in good faith. That issue or whatever conduct is being complained against, someone can raise it in court but it is for the court now to establish whether you acted in good faith or not.

Hon. Sibanda, thank you very much for your question. We have been capitalising ZAMCO from Treasury and it is reasonably well capitalized. Already, the corporation has already taken over in the region of $300 million, give or take of collateralised debt from commercial banks.  The total none performing loans come to US$750 million and so far I think we are already halfway but we are only talking collaterised.  I want you to understand that we are not doing this for charity.  Our investment plan is that a lot of people are losing houses which they collaterised to the banks and for no value.  We think that is not fair, so, what we are doing is taking over the loan and the collateral.  They will have to cede whatever house or industrial property to ZAMCO.

Our belief is that things will not remain as bad.  Over the years, prices will pick up and we will be in a position where some of the people will be able to pay us.  Some of them have already started paying us because all they needed was breathing time.  Those who do not pay now and we end up selling; at least we will be able to sell for more value to pay the debt and may even have some surplus for the debtor.  That is basically what is informing our own decisions on ZAMCO.  Thank you.

I move that the Bill be read a second time.

Motion put and agreed to.

Bill read a second time.

Committee:  With leave, forthwith.

COMMITTEE STAGE

BANKING AMENDMENT BILL [H.B. 6A, 2015]

House in Committee.

Clauses 1 to 31 put and agreed to.

House resumed.

Bill reported without amendments.

Third Reading: With leave, forthwith.

THIRD READING

BANKING AMENDMENT BILL [H.B.6A, 2015]

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Madam President, I now move

that the Banking Amendment Bill [A.B.6A] be now read the third time.

Motion put and agreed to.

Bill read the third time.

MOTION

ADJOURNMENT OF THE HOUSE

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA):  Madam President, I rise to

adjourn the House but before I do so, let me take the opportunity to thank Hon. Senators for their work throughout the year.  They have done commendable work, more particularly, every time I have come to this House,

I have received unqualified support from this august House.

         So, I take the opportunity to wish all Hon. Senators and you Madam President, a happy Christmas and prosperity in the New Year. I am confident that given the policies that we are pursuing, prosperity should be around the corner. With these remarks, I move that the House do now adjourn to 2^nd February, 2016.

THE PRESIDENT OF THE SENATE: I also wish to thank the Hon.

Senators for a sterling job that we have done.  We really deserve to give ourselves a pat on the back because we did so well [HON. SENATORS: Hear, hear] –   I wish you a free accident holiday and a merry Christmas.  Let us go and eat chicken, goats during Christmas and a Happy New Year holiday.

        Motion put and agreed to.

The Senate accordingly adjourned at Nineteen Minutes past Seven

O’clock p.m. until Tuesday, 2^nd February, 2016.